Mongolia’s MMC seeks loan maturity extension from lenders
(BLOOMBERG) -
Mongolian Mining Corp. is talking to lenders about extending its debt maturities after the company’s profit swung to loss in the first half of the year.
MMC, which accounts for 42 percent of Mongolia’s coal exports to China, is negotiating an agreement to reschedule loan repayments, Chief Executive Officer Battsengel Gotov told reporters in Hong Kong today. The company reported a net loss of $25.2 million for the six months through June 30 versus a $31 million profit the same period a year earlier, according to a statement to the city’s stock exchange.
“We’re talking currently about the potential of rescheduling the repayment, so pushing out the maturity,” Gotov said. This will “create a window, and we believe that, for the next six to 12 months, it will allow the company to focus on building up cash reserves.”
Policy makers in China, Mongolia’s biggest trading partner, want to end reliance on so-called smokestack industries by boosting domestic consumption as growth in the world’s second- largest economy slows. Prices of coking coal, a raw material used to produce steel, have fallen this year, with the average selling price for MMC’s washed hard product sliding 29 percent in the first half versus the same period of 2012, according to a company presentation.
Bank Facilities
MMC, which is based in Ulaanbaatar and runs Mongolia’s Ukhaa Khudag mine, had $934.7 million short- and long-term debt outstanding and $128.6 million cash as of June 30, according to filings to the Hong Kong stock exchange.
The debt includes $20 million borrowed from Golomt Bank of Mongolia via a loan which matures next month, plus $20 million from Trade & Development Bank of Mongolia LLC which is slated for repayment by December.
MMC also has $600 million of bonds due March 2017, data compiled by Bloomberg show. The notes pay an 8.875 percent coupon and yielded 22.9 percent as of 4:05 p.m. in Hong Kong.
Net financing costs totaled about $38.6 million in the first six months of the year compared with $5.8 million in the same period of 2012. The company plans to boost its cash position by selling a road used for coal transport to the government and by focusing on reducing costs, Gotov said.
Coal prices, declining since March, have also bottomed, and started rebounding earlier this month, he said.
Stock in MMC fell 1.2 percent to HK$1.63 in Hong Kong trading today, the lowest since Aug. 2.
--Editors: Katrina Nicholas, Pavel Alpeyev
To contact the reporters on this story: Rachel Evans in Hong Kong atrevans43@bloomberg.net; Michelle Yun in Hong Kong at myun11@bloomberg.net
To contact the editor responsible for this story: Katrina Nicholas atknicholas2@bloomberg.net
©2013 Bloomberg News
Mongolian Mining Corp. is talking to lenders about extending its debt maturities after the company’s profit swung to loss in the first half of the year.
MMC, which accounts for 42 percent of Mongolia’s coal exports to China, is negotiating an agreement to reschedule loan repayments, Chief Executive Officer Battsengel Gotov told reporters in Hong Kong today. The company reported a net loss of $25.2 million for the six months through June 30 versus a $31 million profit the same period a year earlier, according to a statement to the city’s stock exchange.
“We’re talking currently about the potential of rescheduling the repayment, so pushing out the maturity,” Gotov said. This will “create a window, and we believe that, for the next six to 12 months, it will allow the company to focus on building up cash reserves.”
Policy makers in China, Mongolia’s biggest trading partner, want to end reliance on so-called smokestack industries by boosting domestic consumption as growth in the world’s second- largest economy slows. Prices of coking coal, a raw material used to produce steel, have fallen this year, with the average selling price for MMC’s washed hard product sliding 29 percent in the first half versus the same period of 2012, according to a company presentation.
Bank Facilities
MMC, which is based in Ulaanbaatar and runs Mongolia’s Ukhaa Khudag mine, had $934.7 million short- and long-term debt outstanding and $128.6 million cash as of June 30, according to filings to the Hong Kong stock exchange.
The debt includes $20 million borrowed from Golomt Bank of Mongolia via a loan which matures next month, plus $20 million from Trade & Development Bank of Mongolia LLC which is slated for repayment by December.
MMC also has $600 million of bonds due March 2017, data compiled by Bloomberg show. The notes pay an 8.875 percent coupon and yielded 22.9 percent as of 4:05 p.m. in Hong Kong.
Net financing costs totaled about $38.6 million in the first six months of the year compared with $5.8 million in the same period of 2012. The company plans to boost its cash position by selling a road used for coal transport to the government and by focusing on reducing costs, Gotov said.
Coal prices, declining since March, have also bottomed, and started rebounding earlier this month, he said.
Stock in MMC fell 1.2 percent to HK$1.63 in Hong Kong trading today, the lowest since Aug. 2.
--Editors: Katrina Nicholas, Pavel Alpeyev
To contact the reporters on this story: Rachel Evans in Hong Kong atrevans43@bloomberg.net; Michelle Yun in Hong Kong at myun11@bloomberg.net
To contact the editor responsible for this story: Katrina Nicholas atknicholas2@bloomberg.net
©2013 Bloomberg News
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