Modern Land (China) cancels consent solicitation to extend 12.85% notes

By Marisa Wong

Los Angeles, Oct. 20 – Modern Land (China) Co., Ltd. is terminating the consent solicitation relating to its 12.85% senior notes due 2021 (ISIN: XS1986632716), according to a company announcement on Wednesday.

Modern Land said it continues to experience liquidity issues and has determined that completing the consent solicitation and effecting the proposed amendments would not be in the best interest of the company and other stakeholders, including holders of the 12.85% notes.

As a result, the company will not accept any of the consents delivered by holders, and no consent fee will be paid.

As announced on Oct. 11, the main purpose of the consent solicitation was to obtain the needed consents to amend the indenture governing the notes to extend the maturity date and to improve the company’s liquidity and cash flow management and to avoid any potential payment default under the notes.

Specifically, the company sought to extend the maturity date to Jan. 25, 2022.

The company also proposed adding an optional redemption to redeem the notes, in whole or in part, at par plus accrued interest at any time on or after Oct. 25 and to shorten the notice period to not less than seven days and no more than 30 days from not less than 30 days and no more than 60 days.

In addition, the company asked holders to approve a reduction of the principal amount outstanding through a redemption of $87.5 million of the notes, or 35% of the outstanding amount, on Oct. 25.

The consent solicitation was set to expire at noon ET on Oct. 20.

Holders who are non-U.S. persons located outside the United States or some fiduciaries holding accounts for the benefit of non-U.S. persons outside the United States were eligible to participate.

To take effect, the proposals required consents from holders of at least 90% of the outstanding principal amount.

Had the consent solicitation been successful, the company would have paid a consent fee of $1.00 for each $1,000 principal amount to all holders, including non-consenting holders and holders who are not eligible to participate in the solicitation.

As of Oct. 11, there was $250,002,000 principal amount outstanding and set to mature on Oct. 25, 2021.

Guotai Junan Securities (Hong Kong) Ltd. (+852 2509 5342, dcm.reunion@gtjas.com.hk) was the solicitation agent.

D.F. King Ltd. (+852 3953 7208, +44 20 7920 9700, modernland@dfkingltd.com) was the information and tabulation agent.

The Beijing-based property developer is focused on the development of green, energy-saving and eco-friendly residences in China.

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