November 23, 2017 / 1:51 AM / a year ago

Miner SouthGobi says in talks with CIC on interest repayment

HONG KONG, Nov 23 (Reuters) - Vancouver-based coal miner SouthGobi Resources Ltd said on Thursday it had not paid any interest on a convertible debenture to China Investment Corporation (CIC) and was in talks with CIC regarding a repayment plan.

The news comes nearly a week after SouthGobi said its Chairman and Chief Executive Officer Aminbuhe was arrested on Oct. 11 and detained in China as a suspect in a fraudulent loan case.

It was not immediately clear if that loan was the one related to CIC.

“While the company believes that an agreement will be reached, there is no assurance that an agreement will be concluded on terms favourable to the company or at all,” the firm said in a filing to the Hong Kong bourse.

“In such event, the value of the company’s common shares could be materially and negatively affected,” it added.

The total cash interest payments and associated fees, which were due and payable to CIC on Nov. 19, amounted to $17.8 million. The company is also obliged to issue $4 million worth of payment-in-kind interest shares to CIC the same day.

Hong Kong shares of SouthGobi slid 1.5 percent in early trade, lagging a 0.1 percent gain in the benchmark index. (Reporting by Donny Kwok; Editing by Kim Coghill)

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