Hong Kong's Shui On solicits consents to amend four series of notes

By Marisa Wong

Madison, Wis., Nov. 20 - Shui On Land Ltd. announced consent solicitations to amend the indentures of four series of notes issued by subsidiaries Shui On Development (Holding) Ltd. and Shui On Development (Singapore) Pte. Ltd.

Specifically, the company is seeking approval from holders of the RMB 3.5 billion dollar-settled 7 5/8% senior notes due 2015 and $875 million 9¾% senior notes due 2015 issued by Shui On Development and the S$250 million 8% senior notes due 2015 issued by Shui On Singapore, as well as the $500 million 10 1/8% senior perpetual capital securities callable 2017 issued by Shui On Development.

The proposed amendments affect covenants relating to restricted payments, liens, asset sales and transactions with shareholders and affiliates and will give Shui On flexibility to carry out an investment agreement with Canada's Brookfield Property Partners.

The company announced late last month that Brookfield agreed to invest $500 million in Shui On's subsidiary, China Xintiandi Holding Co. Ltd., in exchange for convertible perpetual securities issued by the subsidiary and warrants for Shui On shares.

The consent solicitations expire at 4 a.m. ET on Dec. 10.

Shui On Development is offering an early consent payment of RMB 1,500 per RMB 100,000 principal amount of 7 5/8% notes and $15.00 per $1,000 principal amount of 9¾% notes to holders who deliver their consents by the early consent deadline at 4 a.m. ET on Dec. 5.

Holders who deliver their consents after the early deadline but on or prior to the expiration date will receive the base consent payment of RMB 750 per RMB 100,000 of 7 5/8% notes and $7.50 per $1,000 of 9¾% notes.

Shui On Singapore will pay an early consent payment of S$15.00 per S$1,000 of 8% notes to holders who deliver their consents by the early consent deadline and a base consent payment of S$7.50 per S$1,000 to holders delivering consents after the early deadline.

The consent payment and approval of the proposed amendments are conditioned on the receipt of consents from a majority in principal amount of each class of notes.

The consent solicitation for Shui On Development's 10 1/8% perpetual securities will be in the form of an extraordinary resolution at a holders' meeting on Dec. 12.

The extraordinary resolution requires a majority of at least 75% of the votes cast.

The quorum at the meeting is at least two persons representing holders of over 50% of the outstanding principal amount of 10 1/8% notes.

If the resolution passes, Shui On Development will pay holders who voted in favor of the amendments a consent solicitation fee. Holders who deliver their consent instructions by 4 a.m. ET on Dec. 5 will receive an early consent fee of $15.00 per $1,000 principal amount of 10 1/8% notes, and holders delivering their voting instructions after the early deadline but before 4 a.m. ET on Dec. 10, the expiration deadline, receive the base consent fee of $7.50 per $1,000 principal amount.

The solicitation agents are J.P. Morgan Securities plc (liability_management_asia@jpmorgan.com; +852 2800 7662) and Standard Chartered Bank (Asia-liability.Management@sc.com; +852 3983 8648). D.F. King & Co., Inc. (sol@king-worldwide.com; +44 207 920 9700 or 212 269-5550) is the tabulation and information agent.

Shui On Land is a Hong Kong-based property development company.

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