Hongkong Ideal gets consents to amend 14¾% senior notes due 2022

By Taylor Fox

New York, Jan. 6 – Hongkong Ideal Investment Ltd. announced that it received requisite consents from the holders of its $205 million 14¾% guaranteed senior notes due 2022 (ISIN: XS2059534342) to amend the indenture governing the notes, according to a company announcement.

The consent solicitation expired at 11 a.m. ET on Dec. 30, and the company settled payment of the consent fees on Jan. 5.

The second supplemental indenture has become operative upon the payment of the consent fees by the company to the holders.

As previously reported, the company was seeking to amend provisions of the indenture to optimize the capital structure of the group and give it more flexibility for future disciplined development.

Specifically, the amendments modify the definition of change of control to lower the minimum threshold of the permitted holders’ holding of the voting power of the voting stock of the parent guarantor to no less than 40%, the dissatisfaction of which would constitute a change of control.

The company will also now permit (a) the declaration and payment of any dividend by the parent guarantor with respect to its capital stock on or prior to the completion of the initial public offering of the capital stock of the parent guarantor on a qualified exchange in an amount not to exceed the aggregate accrued but undistributed profit as of the most recent audited or reviewed financial statements, or (b) the declaration and payment of any final dividend for any financial year and/or any interim dividend for any fiscal semiannual period ending after the completion of the parent guarantor IPO, provided that the amount of such declaration and payment of dividends for any financial year ending after the parent guarantor IPO under shall not exceed 25% of profit before tax of the parent guarantor for the immediately preceding financial year or, with respect to interim dividends, 25% of profit before tax of the parent guarantor for the immediately preceding fiscal semiannual period.

The company will now delete the covenant on the personal guarantees in its entirety and has, in a subsequent notice, amended the consent solicitation so that the deletion may take effect immediately prior to the completion of the parent guarantor IPO.

The company paid a cash consent fee of $1 for each $1,000 of notes for which a consent is delivered on or prior to the expiration date.

The record date for holders entitled to give consent was 11 a.m. ET Dec. 17.

The consent solicitation was announced on Dec. 18.

The notes are guaranteed by Beijing Hongkun Weiye Real Estate Development Co. Ltd.

The real estate developer is based in Beijing.

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