China’s Golden Wheel looks to exchange three series for 10% three-year notes, cash

By Rebecca Melvin

Concord, N.H., Dec. 21 – Golden Wheel Tiandi Holdings Co. Ltd. said it is would exchange three series of existing notes for new 10% three-year notes plus upfront cash under a proposed restructuring agreement that has received strong support from noteholders so far.

As of Dec. 21, holders of about 60% of the aggregate outstanding principal amount of the existing notes have acceded to the terms of the plan.

The existing notes include Golden Wheel’s $200 million issue of 12.95% senior note due 2022 (ISIN XS2100655807), of which there is $121,506,000 outstanding; its $170 million issue of 14¼% senior notes due 2023 and $85 million 14¼% senior notes due 2023, consolidated and forming a single series (ISIN: XS2199251823), with $178,495,000 outstanding; and its $144,999,000 16% senior notes due 2023 (ISIN: XS2348197554).

Under the Dec. 20 restructuring agreement, the Jan. 22, 2022 put option for the 14¼% notes due 2023 would be revoked.

In exchange for the existing notes, holders would receive a total of $494,433,000 of 10% three-year notes plus accrued interest plus 5% upfront cash.

The notes would mature three years after the effective date of the plan, which is expected to be March 31, 2022.

The company said the restructuring aims to counter macroeconomic conditions including tightened policies adopted by the local Chinese governments toward the real estate sector and deteriorating consumer sentiment in China resulting in the whole real estate sector suffering from short-term liquidity pressures.

The real estate sector continues to be impacted by regional outbreaks of Covid-19 in China since July 2021, including one cluster in Nanjing city where the group’s major businesses are located, the company said.

In addition to the restructuring agreement the company said it intends to dispose certain onshore investment properties in the next three years to help the group meet its repayment obligations under the new notes. The estimated proceeds from these sales is $336 million.

An early eligible creditor fee of 0.4% of the aggregate principal amount of notes excluding any accrued interest will be paid for acceptances received prior to 4 a.m .ET on Dec. 31.

A general eligible creditor fee equal to 0.1% of the aggregate principal amount will be paid for acceptances received prior to 4 a.m. ET on Jan. 14.

The restructuring is intended to be implemented through a Cayman scheme and can be approved by a majority of holders representing at least 75% in value of the existing notes who are present and voting at the scheme meeting.

Holders may accede to the restructuring agreement by executing an accession letter (available at https://sites.dfkingltd.com/goldenwheel) and submitting this to the information agent at https://sites.dfkingltd.com/goldenwheel.

As previously reported, the company hired Guotai Junan Securities (Hong Kong) Ltd. (+852 2509 5465, dcm.ferris@gtjas.com.hk) and Alvarez & Marsal Corporate Finance Ltd. (+852 3102 2600, ProjectFerris@alvarezandmarsal.com) as joint financial advisers to facilitate a consensual arrangement.

The company has also hired Linklaters as a legal adviser.

Noteholders should contact the financial advisers for further information.

Golden Wheel is a Hong Kong-based commercial and residential property developer.

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