Finnish battery chemicals producer Terrafame announced on Thursday it has raised €100 million ($104.72 million) in equity and shareholder loans while securing an extension on its existing bank loans and credit facilities, bolstering its financial position amid a challenging market environment.
The funding comes from Terrafame’s main owners, Finnish Minerals Group and the Galena funds managed by commodities trader Trafigura, and will support the company’s investment program over the next few years. Additionally, Finland’s government injected €30 million into Finnish Minerals Group, which holds a 56.1% stake in Terrafame, strengthening the state-owned company’s ability to support its subsidiary.
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Terrafame has faced declining sales and negative cash flow in recent quarters due to weakened demand for battery-powered vehicles in Europe. The company announced layoffs last year as part of cost-cutting measures.
“The funds will finance ongoing significant investments and secure the continuation of operations far into the future,” Terrafame said in a statement. The financial package includes €50 million in equity and a €50 million shareholder loan from its owners. Furthermore, the maturity of Terrafame’s €315 million in bank loans and credit facilities has been extended by one year to late 2028.
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“These arrangements demonstrate our owners’ and Nordic banks’ long-term commitment to and confidence in our business despite the external challenges we have faced,” Terrafame Chief Financial Officer Ville Sirvio said in the statement.
Terrafame operates a multi-metal mine and production facilities in Sotkamo, central Finland, and is a key supplier of battery-grade chemicals for the electric vehicle industry.
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