SouthGobi Misses Deferred Obligation Payments to China’s CICby
Mongolian coal miner SouthGobi Resources Ltd. said it hasn’t repaid a deferred interest obligation and is again renegotiating a repayment plan with sovereign wealth fund China Investment Corp.
The deferral stemmed from a May 30 agreement to repay $18.7 million by June 17, SouthGobi said in a Hong Kong stock exchange filing Friday. There is no assurance that a plan favorable to the company will be concluded, it said.
The company warned last year that failure to pay CIC could have resulted in bankruptcy. Once one of the nation’s top foreign companies, SouthGobi has seen its market value collapse due to falling coal prices and a difficult investment climate in Mongolia. Its shares currently have a market value of $47.2 million, compared with more than $3 billion in 2011.
SouthGobi’s shares climbed 5.2 percent to a three-week high of HK$1.42 in Hong Kong on Friday.