Chengdu Communications seeks consents to avoid change-of-control put

Chicago, March 9 – China’s Chengdu Communications Investment Group Corp. Ltd. commenced a consent solicitation related to its $300 million outstanding 4¾% bonds due 2027 (ISIN: XS1733835257), according to an announcement.

Currently the government of Sichuan Province in China owns all of the share capital of the company.

The government is going to transfer 10% of its share capital to the Sichuan Finance Bureau, however, to replenish the social security funds of the province.

The share transfer will constitute a change of control.

The government, through the State-owned Assets Supervision and Administration Commission of Chengdu Municipality, will still be a controlling shareholder (with 90% of the share capital) after the transfer of the shares, and there should be no material adverse impact on the ability of the issuer to repay its existing debt, including the bonds.

The company is soliciting consents from bondholders to avoid a change of control put at 101 for the bonds.

A consent fee of $25 per $1,000 bond will be paid to favorably consenting Regulation S noteholders who submit instructions before 11 a.m. ET on March 24.

Bondholders who submit favorable instructions after the early deadline but before 11 a.m. ET on March 24 will be paid $15 per $1,000 bond.

The same payments will be made for U.S. holders, but they are considered “ineligible bondholders” and as such will receive “ineligible bondholder payments.” The deadlines are the same.

A meeting will be held at 4 a.m. ET on March 31 to approve an extraordinary resolution.

The meeting needs a quorum, and, the extraordinary resolution needs to be passed for the payments to be made.

The expected payment date is April 8.

The solicitation agent is China International Capital Corp. (+852 2872 2100, +44 20 7367 5718, IB_Project_CDJT@cicc.com.cn).

The information and tabulation agent is D.F. King Ltd. (+852 3953 7208, +44 20 7920 9700, chengdu@dfkingltd.com).

The infrastructure construction services company is based in Chengdu, China.

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