Update on interest payment obligations to CIC
May 25, 2017
Update on interest payment obligations to CIC
HONG KONG – SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (“SouthGobi” or the
“Company”) today announced an update on its interest payment obligations to China
Investment Corporation (“CIC”).
Pursuant to the convertible debenture between CIC and the Company executed in November
2009 (the “ Convertible Debenture ”) and the deferral agreement between CIC and the
Company executed on December 29, 2016 (the “December 2016 Deferral Agreement”), the
total cash interest payments and associated fees which were due and payable to CIC on
May 19, 2017 amounted to US$22.3 million (the “May 2017 Interest Payable”).
As of the date of this announcement, the Company has not paid the May 2017 Interest Payable
within the cure period provided for in the Conve rtible Debenture or agreed upon a repayment
plan for such amount with CIC. Accordingly the principal amount outstanding and all accrued
and unpaid interest and other amounts owing under the Convertible Debenture and the
December 2016 Deferral Agreement would immediately become due and payable in the event
that CIC provides notice to the Company.
The Company is in discussions with CIC for a repayment plan for the May 2017 Interest
Payable. While the Company believes that an agreement will be reached , there is no
assurance that an agreement will be concluded on terms acceptable to the Company, or at all.
In such event, the value of the Company’s common shares could be materially and negatively
affected. A s a result, shareholders of the Company and potential investors are advised to
exercise caution when dealing in securities of the Company.
The Company will provide further updates of the status of the May 2017 Interest Payable as
appropriate.
About SouthGobi
SouthGobi, listed on the Toronto and Hong Kong stock exchanges, owns and operates its
flagship Ovoot Tolgoi coal mine in Mongolia. It also holds the mining licences of its other
metallurgical and thermal coal deposits in South Gobi Region of Mongolia. SouthGobi produces
and sells coal to customers in China.
Contact:
Investor Relations
Kino Fu
Office: +852 2156 7030
Email: [email protected]
Website: www.southgobi.com