Molycorp defers second interest payment in 2 weeks
TORONTO (miningweekly.com) – US rare earths producer Molycorp on Monday deferred making a second interest payment in two weeks.
The Greenwood Village, Colorado-based miner said that it would take advantage of a 30-day grace period on a $3.36-million semi-annual interest payment related to its 3.25% senior unsecured convertible notes due 2016.
Molycorp said the decision would not trigger any cross-defaults on its other loans.
The NYSE-listed company early this month deferred a $32.5-million interest payment on its 10% senior notes due 2020, choosing to also use the 30-day grace period.
The Wall Street Journal reported that analysts expected the company to file for bankruptcy protection before the end of the month.
Facing a $1.7-billion debt load, Molycorp, which operated the Mountain Pass rare earths mine and processing facility, in California, the largest rare earths mine outside of China, had retained financial and legal advisers to assist it in restructuring its debt and was in discussions with its creditors. The company had in March warned that it might not have enough money to continue as a viable entity if its debt restructuring efforts failed.
Investors were encouraged by the company's debt restructuring efforts, raising the NYSE-listed stock price 21% to $0.44 apiece on Monday afternoon.
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