MongolianMining Corp. said July 8 that it has gained the support ofnoteholders for its proposed restructure of US$600.0 million worth of debt.
Receivers were appointed to subsidiary after thecoking coal producer failed tomake a payment on its 8.875% senior notes due 2017.
Mongolian Mining has been working since January to secure a restructuring plan forthe debt.
While the company is yet to secure a binding agreement withits lenders, the deal will include the restructuring of the 2017 notes andamounts outstanding under a facilities agreement with BNP Paribas Singapore andIndustrial and Commercial Bank of China Ltd.
Subsidiary Energy Resources LLC will issue new secured notes worthUS$420 million plus accrued interest with a six-year maturity, while MongolianMining will issue US$150 million of new perpetual notes with no maturity dateto existing noteholders and lenders.
The new secured notes will be guaranteed by Mongolian Miningand several of its subsidiaries and be secured against several assets,including an 18-MW power plant owned by United Power LLC, and the shares of five companies,including Mongolian Coal Corp. Ltd. (Hong Kong).
Under the debt restructure, Mongolian Mining will also issue1,029,176,778 shares, or 10% of its share capital, for no consideration toexisting noteholders and lenders.
The company is continuing talks with creditors to finalizethe terms of the deal.