Mongolian Mining Defaults on Bond Coupon as Grace Period Endsby
Failed to pay $26.6 million semi-annual interest in 30 days
Coal miner said last month it was in cross-default on notes
Mongolian Mining Corp. failed to make a $26.6 million coupon payment on bonds, in the latest sign of financial stress in the coal industry.
The firm missed the semi-annual interest payment due March 29 on the $600 million of 8.875 percent securities, and failed to meet the obligation within a 30-day grace period, it said in a stock exchange filing Friday. The miner said last month that it didn’t make principal and interest payments on a $200 million loan facility and wasn’t able to get a temporary waiver from banks, triggering a cross-default on the notes and other liabilities.
The company mines and exports coking coal, which is used in steelmaking. China’s weakest economic growth in a quarter-century and shift toward a consumer-led economy has added to strains in the global coal and steel industries. Asian peers including PT Berau Coal Energy, Winsway Enterprises Holdings Ltd. and Hidili Industry International Development Ltd. have reneged on bonds. Peabody Energy Corp., the largest U.S. coal miner, filed for bankruptcy earlier this month.
Mongolian Mining said in the statement Friday it hasn’t received notice from noteholders demanding immediate repayment of any outstanding amount on the securities.