Sino-Ocean adds third meeting for holders of corporate bonds

By Marisa Wong

Los Angeles, Oct. 19 – Sino-Ocean Group Holding Ltd. made yet another update to the bondholder meetings announced last Friday and then amended on Tuesday, according to a notice on Thursday.

The bondholders are holders of wholly owned subsidiary Sino-Ocean Holding Group (China) Ltd.’s corporate bonds due Oct. 19, 2025. As of Oct. 13, the balance of the corporate bonds is RMB 3 billion, and the current coupon rate is 4.76%.

Third meeting

On Wednesday, the subsidiary published a notice of a third online meeting in 2023 for holders of the corporate bonds.

The third meeting will be held on Oct. 20.

The company said the purpose of the meeting is to consider, among other things, rules for the bondholder meetings and to carry out adequate communication and consultation with investors, obtain a reasonable period of time to settle the repayment of the bonds, minimize relevant risks, push forward the repayment of interest on the bonds steadily and safeguard the interests of bondholders.

The proposals fall under the following:

• Exemption of procedures for the notice of the third meeting and the provisional proposals; and

• Adding a grace period for the repayment of interest on the bonds.

If the resolution is passed by the third meeting, the time of repayment of interest accrued during the period from Oct. 19, 2022 to Oct. 18, 2023 will be extended to on or before Oct. 26 as the date of completion of payment.

After passing of this resolution, the addition of a grace period – an extension from Oct. 19 to Oct. 26 – would not trigger the default provisions under the bonds.

If the interest due is repaid in full or waived or extended through a meeting of bondholders within that grace period, it will not constitute a default in respect of the bonds.

First meeting

As previously reported, the subsidiary had published a notice on Oct. 9 that it would convene the first online meeting of the holders of the corporate bonds for 2023 on Oct. 18.

According to an announcement on Tuesday, the company put forward two provisional proposals on Oct. 16 for consideration at the first meeting.

These provisional proposals are broadly:

• Exemption of deadline for the notice of the first meeting and the restrictions and deadline for the person making provisional proposals; and

• Adding the grace period and providing credit enhancement measures for the repayment of interest of the corporate bonds.

Passing of the grace period resolution at the first meeting would have extended the time of repayment of interest accrued during the period from Oct. 19, 2022 to Oct. 18, 2023 to on or before Dec. 19 as the date of completion of payment.

The company also announced on Tuesday that it had extended the voting deadline for the first meeting to 12 a.m. ET on Oct. 19 from 10 a.m. ET on Oct. 18.

Second meeting

As announced last Friday, the issuer had also published a notice on Oct. 12 of a second online meeting of the holders of the corporate bonds for 2023. The second meeting was to be convened on Oct. 16.

On Tuesday, the company said it had extended the voting deadline for the second meeting to 12 a.m. ET on Oct. 19 from 9 a.m. ET on Oct. 16 in order to communicate and negotiate with bondholders.

As previously announced, the purpose of the second meeting was for holders to consider the following:

• Exemption of relevant procedures for the notice of the second meeting and the submission of provisional proposals; and

• Adding a grace period for the repayment of interest of the corporate bonds.

Passing of this resolution of the second meeting would have extended the time to repay interest accrued during the period from Oct. 19, 2022 to Oct. 18, 2023 so that the date of completion of payment would be Dec. 19 at the latest.

More details

If a grace period is granted, no default interest will be imposed during the postponed repayment period for the interest; no default payment, overdue interest and default interest, among others, will be set up or incurred separately; and interest will continue to be payable at the current coupon rate.

The company reiterated in each of its recent announcements that it is trying not to evade and revoke debts with respect to the corporate bonds. The issuer said in the event that it anticipates it will not be able to or it will fail to repay the principal and/or interest of the bonds as scheduled, it will formulate a reasonable debt repayment plan and proposal in a timely manner for the consideration of the bondholders and will strictly implement and enforce the debt repayment plan.

As noted before, because there are still uncertainties as to the repayment plan, trading of the bonds on the Shanghai Stock Exchange has been suspended since the start of trading on Oct. 10.

The property developer is based in Hong Kong.

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