Hong Kong’s Greenland solicits consents to prevent defaults

Chicago, Oct. 31 – Greenland Global Investment Ltd. is seeking holder consent to some amendments and waivers relating to nine securities that list Greenland Holding Group Co. Ltd. as guarantor, according to an announcement.

Securities

The securities covered in the solicitation are the following:

• $361,890,000 outstanding 5.6% notes due November 2022 (ISIN: XS2076775233);

• $26,882,000 outstanding 6Ό% notes due December 2022 (ISIN: XS2188664929);

• $270,447,0003 outstanding 5.9% notes due February 2023 (ISIN: XS1760383577);

• $398.5 million outstanding 6 1/8% notes due April 2023 (ISIN: XS2207192191);

• $479.78 million outstanding 6Ύ% notes due June 2023 (ISIN: XS2016768439);

• $500 million outstanding 6 3/8% notes due September 2023 (ISIN: XS2055399054);

• $299.35 million outstanding 6Ύ% notes due March 2024 (ISIN: XS2108075784);

• $246 million outstanding 7Ό% notes due January 2025 (ISIN: XS2207192605); and

• $599 million outstanding 5 7/8% guaranteed bonds due 20244 (ISIN: XS1081321595).

The amounts above do not include amounts held by the issuer, guarantor and their respective subsidiaries which have been purchased but not canceled.

Background

Due to the Covid pandemic and a downturn in the Chinese real estate industry, Greenland does not anticipate it will be able to repay the outstanding notes due in November on their maturity date and foresees difficulties in repaying the other series of securities in full on their respective maturity dates.

As an overview, the company is seeking to extend the maturity date of the notes due June 2023 by one year and all of the other series by two years. Additionally, noteholders are being asked to waive any potential or actual default as a result of the non-payment of the November 2022 notes.

In the case the consent solicitations are successful, the issuer and the guarantor are proposing to make a partial redemption of 5% of the aggregate principal/nominal amount outstanding of the securities on the payment date (in the case of the November 2022 notes) or on their original maturity dates (in the case of the other series of the securities).

The company also intends to pay interest when due and payable.

Amendments

As mentioned above, the company would like to extend the maturity date on the notes due in June 2023 one year to June 25, 2024. Also, the company is seeking consent to extend all of the maturity dates on the other securities two years.

Also mentioned above, the company would make a 5% partial redemption on the relevant dates.

The amendments would additionally include a new specified asset sale for the guarantor to procure the net consideration to be applied towards payment of principal, interest and any other amount.

There would be a call option for the issuer to redeem the securities at any time prior to the new maturity dates.

The amendments would include a grace period of seven days for principal payments and 30 days for interest payments.

Noteholders are being asked to approve a carving out from the cross-acceleration condition or cross-default condition (as the case may be) any default or event of default under or in connection with any other series.

The solicitation includes making relevant amendments relating to the NDRC filing and SAFE registration provisions (including changing the registration deadline to 180 calendar days after the amendment effective date).

Also, the November 2022 notes would not have to be listed anymore and would be delisted on Nov. 13.

Noteholders would also be asked to waive any default or potential default.

Details

Noteholder meetings will start at 10:30 p.m. ET on Nov. 21 at the offices of Linklaters in Hong Kong.

Meetings are being held in-person, but that could change to a virtual meeting, if necessary.

There is an early consent fee of 0.5% of the principal amount of the relevant series to be paid for holders who submit votes in favor by the 11 a.m. ET Nov. 11 early consent fee deadline if the relevant extraordinary resolution is passed.

There is a base consent fee of 0.25% of the principal amount for votes in favor that are submitted after the early consent fee deadline but before the 11 a.m. ET Nov. 18 voting deadline, payable subject to the passing of the relevant extraordinary resolution.

Ineligible holders will be eligible for an equivalent payment, similar to the consent fees. The deadlines are the same.

Payment for the consent fees and the upfront payment for the November 2022 notes is expected to be paid no later than Nov. 25, the same date as the amendment effective date.

The solicitation agents are BOCI Asia Ltd. (+852 3988 6302, Project.Greenland.LM@bocigroup.com) and CLSA Ltd. (+852 2600 8888, project.greenland@clsa.com).

Kroll Issuer Services Ltd. is the information and tabulation agent (+44 20 7704 0880, +852 2281 0114, greenland@is.kroll.com).

Greenland is a Shanghai-based real estate developer.

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