ANNUAL%20REPORT%202015%20eng

Notes to Consolidated Financial Statements
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
(b)
Basis of preparation of the financial statements (Continued)
– Future trading may not be in line with the assumption in the Group’s latest forecasts, the
achievability of which is dependent upon the current economic environment and the price of
coking coal market;
– The Group is due to redeem the senior notes (the “Notes”) issued by the Company with a
principal amount of USD600,000,000 on 29 March 2017 (see Note 26). As announced by
the Company on 26 January 2016, 14 March 2016 and 23 March 2016, the Group has been
actively seeking for the potential restructuring of the Notes (the “Notes Restructuring”) with
the holders of the Notes (the “Holders”). Management maintains regular discussions with the
appointed restructuring advisers, the legal advisers, the financial advisers and the Holders. These
discussions remain constructive, and considering the commercial basis of this restructuring, the
Directors have no reason to believe that the restructuring will not be achieved after formulating
and agreeing a detailed plan protecting the interests of all stakeholders of the Group in this
regard;
– The Group is due to repay the secured interest-bearing borrowings from BNP Paribas, Singapore
Branch and Industrial and Commercial Bank of China Limited (collectively, the “Lenders”) (the
“Facility”) with a principal amount of USD93,000,000 within the year ending 31 December 2016
(see Note 23). Management has initiated discussions with the Lenders for revised terms of the
debt facility. Given the material amount of the Facility and also existing Intercreditors Agreement
between Lenders and Holders in relation to the shared securities and guarantees, the discussions
to revise the Facility are undertaken in connection with the Notes Restructuring. The Directors
continue to maintain regular discussion with the Lenders and to seek for constructive resolutions;
– The Group is due to repay the secured interest-bearing borrowings from European Bank
for Reconstruction and Development, Nederlandse Financierings-Maatschappij voor
Ontwikkelingslanden N.V., and Deutsche Investitions-und Entwicklungsgesellschaft mbH
(the “Parallel Lenders”) with a principal amount of USD51,818,000 within the year ending
31 December 2016 (see Note 23). On 11 March 2016, the Group had entered into Deed of
Termination and Release (the “DTR”) with the Parallel Lenders. Pursuant to the DTR, the Group
shall endorse to the Parallel Lenders certain promissory notes issued by GoM (see Note 36(a))
with an amount totalling approximately MNT105.6 billion, the obligations under the borrowings
will be discharged in their entirety and the relevant security thereunder will be released after 121
calendar days plus 2 business days from the signing of the DTR. The Group had completed the
endorsement of promissory notes as required by the DTR as of the date of these consolidated
financial statements;
– The Group is due to repay promissory notes of USD72,000,000 to QGX Holding Ltd. (“QGX”)
on 31 March 2016 (see Note 24(iv)). Throughout year ended 31 December 2015, extension of
the outstanding promissory note payables had been granted by QGX on a quarterly basis. The
Directors are seeking to extend such support from QGX into upcoming future in a contractual
form. With full awareness of the Notes Restructuring, the reaching of such contract is on the
condition of the achievability of the restructuring of the Notes, and meanwhile, the Directors
continue to maintain regular and constructive discussions with QGX.
Annual Report 2015
117