Mongolian Mining launches tender offers for senior notes, perpetuals

By Sarah Lizee

Olympia, Wash., March 18 – Mongolian Mining Corp. and indirect subsidiary Energy Resources LLC launched tender offers for up to $50 million of its $194,999,827 of outstanding perpetual securities and a maximum amount of its $412,465,892 of outstanding guaranteed senior notes due 2022.

The tender offers will expire at 6 a.m. ET on April 16.

The minimum offer price for the perpetual securities is $450 for each $1,000 principal amount, and the maximum offer price is $510 for each $1,000 principal amount.

Holders whose perpetual securities are validly tendered on or before the early tender deadline of noon ET on April 1 will receive an early tender premium of $50 for each $1,000 principal amount.

Holders whose senior notes are validly tendered on or before the early tender deadline will receive a total consideration of $1,010 for each $1,000 principal amount, which includes the early tender premium of $50 for each $1,000 principal amount. The maximum amount of senior notes that may be accepted for tender will be set at pricing, which is expected to occur on April 3.

The early results of the tender offers will be announced on April 2. Settlement is expected for April 25.

Mongolian Mining 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 senior notes is to improve the terms of Energy Resources’ debt to enable additional flexibility necessary to grow its business in Mongolia.

The company also launched a consent solicitation for the senior notes, under which the company is seeking to amend some terms of the notes, including eliminating some of the covenants, restrictive provisions and events of default.

Holders may not deliver consents without tendering senior notes.

The tender offers and consent solicitations are 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 is also conditioned on a minimum of $275,320,982 of the senior notes being validly tendered at or prior to the expiration time, among other conditions.

Pricing of the new notes is expected to occur on April 2, and settlement is expected for April 12. 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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