Yango Justice extends exchange, solicitation expiration second time

Chicago, Nov. 15 – China’s Yango Justice International Ltd. pushed the deadline for its exchange offer for three series of senior notes and consent solicitations for those three series and five other notes to approve amendments to the indentures back another five days, according to an announcement.

The company has now extended the expiration deadline to 11 a.m. ET on Nov. 17, back from 11 a.m. ET on Nov. 12 and earlier from 11 a.m. ET on Nov. 10.

The company also provided updates for how the exchange offers and consent solicitation are progressing.

Exchange offers

As previously reported, Yango Justice is offering to exchange three existing notes for new notes due Sept. 15, 2022. The interest rate would be an annual rate of 10¼%.

According to a modification made to the exchange offer on Nov. 8, interest would be paid twice: one on the date that is six months after the original issue date and on the maturity date.

Previously reported, exchanging noteholders would receive $25 in cash as an exchange and consent consideration and also accrued interest in cash.

The note exchange would be an even exchange: $1,000 of new notes for $1,000 of existing notes.

The existing notes that are part of the offer are the:

• $247 million outstanding 10% senior notes due February 2023 (ISIN: XS2056435246) with a minimum acceptance amount of $209.95 million;

• $200 million outstanding 5.3% senior notes due January 2022 (ISIN: XS2281349618) with a minimum acceptance amount of $170 million; and the

• $300 million outstanding 10¼% senior notes due March 2022 (ISIN: XS2008157856) with a minimum acceptance amount of $255 million.

Yango Justice provided an update that as of the first extended expiration deadline, the minimum acceptance amounts had been satisfied for the January 2022 and the March 2022 notes. The company waived the condition for the February 2023 notes.

The company said that it has accepted all of the notes that were tendered by the first extended deadline and undertakes to accept all notes by the second extended expiration deadline.

Put option

The February 2023 notes had a put option on Nov. 12. Noteholders who opted to exercise that option had to withdraw their notes in order to participate in the exchange offer. However, if the exchange offer was not successful, the put option deadline passed and noteholders were not able to re-exercise their put option.

The deadline for the withdrawal of the put option was the close of business on Nov. 8 (London time).

The extended settlement date was scheduled for a time beyond the put option date.

The company says that it has defaulted on the repurchase price, at 102 plus interest, on the put date.

The company added a consent solicitation for all of the notes besides the 2023 notes for a waiver relating to any defaults on the February 2023 notes that would trigger a cross-default.

Tendering noteholders will be deemed to have provided an exit consent and now an exit consent waiver.

The company needs consents from eligible holders of a majority for the exit consent waivers to take effect.

Additionally, because of the default, the amended and restated indenture for the February 2023 notes will no longer be executed.

The holders of the September 2024 notes have right to declare acceleration of the notes to be immediately due and payable.

As of Monday, the company had not received any noticed from holders of the September 2024 notes.

Trading in the September 2024 notes has been suspended, at the request of the company.

Consent solicitation

As previously reported, Yango Justice is also soliciting consents for five other series of notes.

In addition to the three series above, the notes that are part of the consent solicitation are the:

• $300 million outstanding 9¼% senior notes due April 2023 (ISIN: XS2100664544);

• $296 million outstanding 8¼% senior notes due November 2023 (ISIN: XS2122380822);

• $357 million outstanding 7½% senior notes due April 2024 (ISIN: XS2203986927);

• $280 million outstanding 7 7/8% senior notes due September 2024 (ISIN: XS2347769833); and

• $264 million outstanding 7½% senior notes due February 2025 (ISIN: XS2248032653).

Consenting noteholders will receive a $5 cash consent fee.

As of the first extended expiration deadline, the company received the requisite consents for each series of consent solicitation notes.

All consents to the first extended deadline have been accepted, and it is expected that all of the consents by the newly extended deadline will be accepted as well.

The relevant amended and restated indentures and supplemental indentures will be executed on or about Nov. 23.

Purpose

The purpose of the exchange offers and the consent solicitations is to improve liquidity, avoid payment default and preserve options to stabilize the company and keep it as a going concern.

If the exchange offers and the consent solicitations are unsuccessful, Yango Justice may not be able to repay the existing notes upon maturity and plans to engage Admiralty Harbour Capital Ltd. as a financial adviser to contemplate an alternative liability management exercise.

Details

The cash consideration will be paid within seven business days of the settlement date. Settlement is planned for Nov. 23, pushed back from Nov. 12. Payment of the cash consideration and the consent fee is scheduled for Nov. 29, extended from Nov. 23.

Admiralty Harbor Capital is the dealer manager and solicitation agent (+852 2110 1666, yango@ahfghk.com).

D.F. King & Co., Inc. is the information, exchange and tabulation agent for the exchange offer and consent solicitations (+44 20 7920 9700, +852 3953 7208, yango@dfkingltd.com, https://sites.dfkingltd.com/yango).

More details about the consent solicitations, including copies of the exchange offer and consent solicitation memorandum, can be obtained by contacting D.F. King.

Yango is a real estate development company based in Shanghai.

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