China’s Yestar proposes 9½% five-year notes to restructure 6.9% notes

By Wendy Van Sickle

Columbus, Ohio, Oct. 6 – Yestar Healthcare Holdings Co. Ltd. said it has reached a new restructuring support agreement dated Tuesday and has a proposed new restructuring plan for its $200 million 6.9% senior notes due Sept. 15, 2021, according to an announcement.

The new restructuring support agreement and proposed plan have support of holders of more than 45% of the outstanding principal amount of notes.

A previous restructuring support agreement automatically terminated on Sept. 15, the original longstop date.

In order to receive a cash consent fee under the new restructuring support agreement, noteholders must accede to it by 5 a.m. ET on Oct. 20.

The proposed restructuring calls for an issuance of new notes on the effective date in a principal amount that would be equal to the principal amount of the existing notes plus accrued interest.

The new notes would have a five-year tenor and an increased 9½% coupon.

There would be a required redemption at par plus accrued interest of 5% of the original notes by the end of the first year, 15% of the original notes by the end of the second year, 30% of the original notes by the end of the third year, and 45% of the original notes by the end of the fourth year.

The notes will not otherwise be callable until Sept. 15, 2024, at which time they become callable at 102. The redemption premium steps up to 104 on Sept. 15, 2025 and to 106.5 at maturity. The company said the redemption premium is also an improvement in comparison to the existing redemption premium.

There will be a mandatory prepayment at par with 35% of the cash proceeds of any equity issuance, in the event of such an issuance.

The new restructuring support agreement has a longstop date of Dec. 31. The proposed restructuring and related scheme of arrangement in the Cayman Islands must be implemented by that date.

Consenting noteholders must agree to vote in favor of the Cayman scheme in person or by proxy at the scheme meeting.

The consent fee payable to each eligible noteholder will equal that holder’s pro rata share of $11.84 million.

The Cayman scheme requires support from holders of at least 75% of the outstanding principal amount of notes.

“The company believes that the proposed restructuring when completed will provide the company and the group with a sustainable capital structure to deliver long-term value for all of its stakeholders,” Yestar said in Wednesday’s notice.

D.F. King Ltd. (+44 20 7920 970, +852 3953 7208 or yestar@dfkingltd.com) is the information agent.

Yestar is a Shanghai-based supplier of medical consumables for the in vitro diagnostic market and a manufacturer and distributor of medical imaging products.

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