E-House says restructuring may still be possible without rights issue

By Sarah Lizee

Olympia, Wash., March 13 – E-House (China) Enterprise Holdings Ltd.’s rights issue will not proceed and has now lapsed, according to a company announcement.

The rights issue was one of the conditions precedent to the restructuring effective date occurring under its schemes of arrangement.

The company said this does not mean its restructuring will necessarily fail.

“Negotiations are continuing with the PRC bank to resolve the issues preventing the transfer of Shanghai CRIC to TM Home and the company continues to use its best efforts to resolve the outstanding issues with the PRC bank,” the company said in the announcement.

E-House said it considers that the transfer of Shanghai China Real Estate Information Corp. (CRIC) to TM Home Ltd. is a fundamental part of the bargain voted upon by scheme creditors in connection with the schemes.

The restructuring effective date will not occur if the issues regarding the transfer cannot be resolved in time by March 28.

E-House said there are two potential outcomes.

If the issues with the PRC bank can be resolved so that Shanghai CRIC can be transferred to TM Home on or before the restructuring effective date, the underwriter has committed to provide the same level of financial support that the company would have otherwise raised in the rights issue by way of a loan.

But, if the issues with the bank cannot be resolved by March 28, the company will not waive the rights issue condition and the restructuring will not come into effect.

“The company remains committed to completing the restructuring, if at all possible,” E-House said.

“In the event that the restructuring does not proceed, the company may, among other things, explore an alternate restructuring with the scheme creditors.”

Shanghai-based E-House mainly offers real estate agency services in the primary market, real estate data and consulting services and real estate brokerage network services. The company’s Chapter 15 case number is 24-10234.

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