Mineweb reported that Northland Resources SA (TSX:NAU) is struggling to deal with a $425-million shortfall related to its Sweden-based Kaunisvaara iron ore project since canceling plans to raise $375 million through equity and bonds. As a result, it may have to think about selling some of its assets.
As quoted in the market news:
But the cancellation of the financing raises the prospect that Northland might be forced to consider some form of asset sale.
Goldman Sachs analyst Fawzi Hanano raised dire implications of such an asset sale in a research note to clients on Tuesday.
“The cancellation of the offering indicates a lack of appetite in the market from existing or prospective investors, leaving the option of asset sales as a more plausible one and potentially completely eroding the company’s equity value.”