Mongolian Mining gets tenders for $23.97 million perpetual securities

By Angela McDaniels

Tacoma, Wash., April 25 – Mongolian Mining Corp. received tenders for $23,971,673, or 12.29%, of its $194,992,827 perpetual securities and $397,847,706, or 96.46%, of subsidiary Energy Resources LLC’s $412,465,892 guaranteed senior notes due 2022, according to a company news release.

The tender offers began March 18. The offers ended at 5 a.m. ET on April 25.

Holders tendered $23,870,120 of perpetuals by noon ET on April 1, the early tender deadline for the perpetuals. That number had risen to $23,915,255 as of noon ET on April 8. Since then, $56,418 of additional perpetuals were tendered prior to the offer expiration. All of the perpetuals were accepted for purchase.

Holders tendered $397,847,706 of the notes by noon ET on April 8, the early tender deadline for the notes, at which point the company decided not to accept any additional notes.

Holders whose perpetual securities were tendered by the early tender deadline received the repurchase price, which includes an early tender premium of $50 for each $1,000 security.

As determined by a modified Dutch auction, the repurchase price is $510 per $1,000 security.

The price for perpetuals tendered after the early tender deadline is $460 per $1,000 principal amount.

Holders whose notes were tendered by the early tender deadline received $1,050 per $1,000 principal amount, which includes an early tender premium of $70.

The settlement date for securities tendered by their respective early tender deadline was April 15.

The settlement date for perpetuals tendered after the early deadline will be May 3.

The tender offers leave $171,084,572 of perpetuals and $14,618,186 of notes outstanding.

The company said it also received consents from all holders who had tendered their notes to amend some terms of the notes, including eliminating some of the covenants, restrictive provisions and events of default.

Mongolian Mining had previously said the purpose of the tender offer for the perpetual securities is to improve the company’s financial position, and the purpose of the tender offer for the notes is to improve the terms of Energy Resources’ debt to enable additional flexibility necessary to grow its business in Mongolia.

The tender offers and consent solicitations were conditioned on the company issuing new guaranteed senior notes, as well as other general conditions having been satisfied or waived. The tender offer for the senior notes was also conditioned on a minimum of $275,320,982 of the notes being validly tendered at or prior to the expiration time, among other conditions.

Mongolian Mining sold $440 million of new 9¼% senior notes due 2024 at par on April 3, as reported by Prospect News. Proceeds from the new senior notes will be used to pay the tender price of the senior notes and perpetual securities. Any remaining proceeds will be used for general corporate purposes, including to repay debt.

J.P. Morgan Securities plc (+852 2800 7650) and Morgan Stanley & Co. International plc (+852 2239 1081 or +44 20 7677 5040) are the dealer managers and solicitation agents. D.F. King Ltd. (+44 20 7920 9700, +852 3953 7230 or mmc@dfkingltd.com) is the information and tender agent.

Mongolian Mining is an Ulaanbaatar, Mongolia-based coking coal producer and exporter.

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