Mongolian Mining Corporation’s Debt Restructuring

Davis Polk advised Mongolian Mining Corporation (In Provisional Liquidation), acting through its joint provisional liquidators, in connection with the restructuring of certain of its debt obligations pursuant to schemes of arrangement implemented under the laws of the Cayman Islands and Hong Kong and other debt obligations pursuant to out-of-court, bilateral arrangements.

The restructuring, proposed in November 2016 by a group of holders of Mongolian Mining’s senior secured notes and certain other creditors of Mongolian Mining, included a debt-for-debt exchange, the issuance of new debt and equity and the consensual restructuring of a senior secured loan facility and promissory notes. Following approval by the relevant scheme creditors and other creditors of Mongolian Mining, the schemes and entry into consensual restructuring arrangements were sanctioned by the Grand Court of the Cayman Islands and the High Court of Hong Kong and the schemes became effective on April 27, 2017. The U.S. Bankruptcy Court for the Southern District of New York granted recognition of the provisional liquidation proceeding of Mongolian Mining in the Cayman Islands under Chapter 15 of the U.S. Bankruptcy Code and enforcement of the Cayman scheme within the United States. On May 4, 2017, Mongolian Mining effected the restructuring of its senior secured notes in aggregate principal amount of $600 million, amounts outstanding under promissory notes in aggregate principal amount of $105 million, amounts outstanding under a $150 million senior secured loan facility, which were exchanged for senior secured notes issued by Mongolian Mining’s wholly owned subsidiary Energy Resources LLC in an aggregate principal amount of approximately $412 million, perpetual notes issued by Mongolian Mining in an aggregate principal amount of approximately $195 million, 1,029,176,615 common shares of Mongolian Mining and a $30 million senior secured loan facility assumed by Energy Resources.

Mongolian Mining is a high-quality coking coal producer and exporter engaged in the open-pit mining of coking coal at deposits in the South Gobi province of Mongolia. Mongolian Mining is considered the largest producer and exporter of washed coal in Mongolia. It is listed on The Stock Exchange of Hong Kong Limited and was the first Mongolian company to offer its shares internationally.

The Davis Polk corporate team included partner William F. Barron (Picture) and counsel Faisal Baloch and Gerhard Radtke. Partner Paul Chow provided Hong Kong law advice. Partner Nick Benham and associate Anne Catherine Ingerslev provided English law advice. The insolvency and restructuring team included partners Timothy Graulich and Darren S. Klein. Partner Martin Rogers provided litigation advice. The tax team included Partner John D. Paton.

Involved fees earner: William Barron – Davis Polk & Wardwell; Faisal Baloch – Davis Polk & Wardwell; Gerhard Radtke – Davis Polk & Wardwell; Paul Chow – Davis Polk & Wardwell; Nick Benham – Davis Polk & Wardwell; Anne Catherine Ingerslev – Davis Polk & Wardwell; Timothy Graulich – Davis Polk & Wardwell; Darren Klein – Davis Polk & Wardwell; Martin Rogers – Davis Polk & Wardwell; John Paton – Davis Polk & Wardwell;

Law Firms: Davis Polk & Wardwell;

Clients: Mongolian Mining Corporation;


Author: Michael Patrini