Coalcorp fails to make 12% notes' December interest payment in cure period, makes purchase offer

By Jennifer Chiou

New York, Feb. 1 - Coalcorp Mining Inc. announced that it did not make the $6.9 million Dec. 31 interest payment on its 12% senior secured notes during the 30-day cure period.

The company had until Jan. 31 to make the payment in order to avoid an event of default.

As already announced on Jan. 7, certain of the company's subsidiaries entered into agreements to sell the La Francia I mine and related infrastructure assets as well as all of the outstanding shares of Adromi Capital Corp., the holder of the La Francia II concession, to a subsidiary of the Goldman Sachs Group, Inc.

In connection with the proposed transaction, Coalcorp began on Jan. 28 an offer to repurchase the notes at the required 102% premium plus any accrued interest.

Concurrently with the restricted transfer offer, Coalcorp also made an offer to repurchase all of the notes at par plus accrued interest.

Both offers are conditional upon the completion of the proposed transaction and will expire on the business day immediately prior to the closing date of the transaction, which is expected for Feb. 19.

The Toronto-based coal company said it will pay the December interest payment prior to the expiration of the offers.

Questions may be directed to Juan Carlos Gomez, interim chief executive officer, at 57 1 658-5050, ext. 9990.

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