Coal miner SouthGobi warns of cash crunch, posts bigger loss

March 24 Mon Mar 24, 2014 9:17am EDT

March 24 (Reuters) - Coal miner SouthGobi Resources Ltd warned that it was unlikely to have enough cash to meet its debt obligations and was looking for financing to continue its operations in Mongolia.

The company, controlled by Rio Tinto Plc , also reported a bigger quarterly loss, mainly due to impairment losses.

SouthGobi said it expected continued pressure on its margins and liquidity as coal prices were likely to stay weak in China this year.

A continued delay in securing additional financing could result in a default of its $250 million China Investment Corp convertible debentures, SouthGobi said.

The company's net loss widened to $138.7 million, or 75 cents per share, in the fourth quarter ended Dec. 31 from $56.6 million, or 31 cents per share, a year earlier.

SouthGobi took impairment losses of $106.8 million in the quarter.

The company reported revenue of $32.5 million.

SouthGobi posted revenue of $1.2 million in the year-earlier quarter, hurt by suspension of production at its flagship Ovoot Tolgoi mine in Mongolia.

The company's shares closed 4 percent lower at 73 Canadian cents on the Toronto Stock Exchange on Friday. (Reporting by Ashutosh Pandey in Bangalore; Editing by Kirti Pandey)

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