Suning seeks consents amendments, waivers under 7½% bonds due 2021

By Marisa Wong

Los Angeles, Aug. 27 – Suning Appliance Group Co., Ltd. is seeking consents to amendments and waivers relating to the $600 million 7½% bonds due Sept. 11, 2021 (ISIN: XS1843422947) issued by Granda Century Ltd. and guaranteed by Suning, , according to a notice.

Suning and Granda are working on funding for their payment obligations under the bonds and conducting the Regulation S consent solicitation to extend the maturity of the bonds, amend some terms of the bonds and suspend events of defaults under the bonds for 18 months to enable the group to implement restructuring of other debt.

The company is offering a consent fee of $10 per $1,000 principal amount.

Consents are due by 11 a.m. ET on Sept. 10.

A bondholders meeting will be held at 10 p.m. ET on Sept. 19.

To pass, the extraordinary resolution requires a majority of votes cast to be in favor of the proposals.

If the quorum required for the meeting, which was not specified in the notice, is not met, then the meeting will be adjourned.

Admiralty Harbour (suning@ahfghk.com) and CMB International (+852

3900 0864, Email: DCMs@cmbi.com.hk) are the solicitation agents. Morrow Sodali Ltd. is the information and tabulation agent (https://bonds.morrowsodali.com/suning).

Background

As announced on July 12, Suning completed a sale to Jiangsu New Retail Innovation Fund II (LP) of 16.96% equity interest in Suning.com. Following the equity transfer, Suning.com ceased to be a subsidiary of Suning, resulting in a change of control and a put right at 101.

The change in the group’s financial position has negatively affected its access to financing and led to some triggering events under some of the group’s loan agreements and notes, which has led to triggering events under the 7½% bonds.

The trustee may, if holders of at least 25% of the bonds request in writing, declare the principal and accrued interest on the bonds immediately due and payable. As of Aug. 27, no such notice has been received by the Suning or Granda.

The issuer and guarantor are facing a liquidity issue, and their existing internal resources would not be sufficient to repay the bonds as they fall due, according to the notice.

Suning said it is in active talks with its creditors, and a financial creditor committee is in the process of being formed. The formation of the committee is to deal with the group’s debt exposures, including its offshore debt.

To protect the interests of the bondholders, the company is proposing to adopt a plan for the bonds under a separate process.

The consent solicitation will allow Suning and Granda to improve the group’s overall financial condition and cash flows and give it necessary financial stability to continue as a going concern.

If this consent solicitation is not successful, the companies will not be able to repay the bonds at their principal amount together with accrued interest at maturity or, if holders exercise their change-of-control put right, at 101 plus accrued interest.

The household products retail holding company is based in Nanjing, China.

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