SouthGobi seeks funds to make interest payment

Thu Nov 20, 2014 7:43am EST
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Nov 20 (Reuters) - Coal miner SouthGobi Resources Ltd said it had missed an interest payment on a $250 million loan owed to China's sovereign wealth fund and is looking to raise funds to avoid a default next month.

The miner, which has $4.9 million in cash, said China Investment Corp had extended the deadline for the $8.1 million payment to Dec. 1 from Nov. 19.

SouthGobi, controlled by Rio Tinto Plc through Turquoise Hill Resources Ltd, said failure to make the payment could trigger "voluntary or involuntary proceedings involving the company".

SouthGobi had originally issued CIC $500 million in convertible debentures in 2009 and a year later the Chinese firm converted half of that into equity.

CIC currently has a stake of 16.5 percent stake in the company. (Reporting by Swetha Gopinath in Bangalore; Editing by Savio D'Souza)