Mongolia Energy fails to redeem principal, pay interest on convertible

By Caroline Salls

Pittsburgh, Nov. 12 - Mongolia Energy Corp. Ltd. neither redeemed the principal nor repaid the interest on its SF convertible note, which expired on Nov. 12, resulting in a breach of the redemption requirement, according to a news release.

The company said its default on redemption of the note also triggers a potential early redemption obligation under HK$2.4 billion of other existing convertible notes.

Mongolia Energy said the SF convertible noteholders proposed a conditional six-month moratorium from Nov. 12 on repayment of principal and interest, subject to formal agreement between the company and the parties.

According to the release, the company will attempt to reach an acceptable moratorium and debt restructuring plan with all of the noteholders and its loan provider.

Mongolia Energy said that failure to reach the terms of the moratorium and debt restructuring and any subsequent enforcement action could have a significant adverse impact on the group's operations and financial position.

In addition, the company warned shareholders and potential investors to exercise caution when dealing in the shares of Mongolia Energy.

Mongolia Energy is a Hong Kong-based energy and resources developer.

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