China’s Hidili wraps tender offer, gets consents to amend 8 5/8% notes

By Marisa Wong

Madison, Wis., Oct. 15 – Hidili Industry International Development Ltd. announced the final results of the tender offer for up to $228 million of its outstanding $400 million 8 5/8% senior notes due 2015 and the related consent solicitation that began on Sept. 16.

As of the expiration of the offer at 11:59 p.m. ET on Oct. 14, holders had tendered $197,249,000, or 51.91%, of the notes, and the company received consents from holders of $325,161,000, or 85.57%, of the outstanding principal amount.

The company said it will accept for purchase all notes tendered under the offer and expects to make payments on Oct. 21.

As previously announced, the company solicited consents from holders to eliminate substantially all of the restrictive covenants and some events of default and other provisions contained in the indenture, as well as to waive any and all actual and potential defaults and events of default that have occurred or are continuing.

The company needed consents from holders of a majority of the outstanding principal amount to approve the proposed amendments and waivers.

Having obtained the required consents, the company expects to execute a supplemental indenture effecting the proposed changes before settlement of the tender offer on Oct. 21.

As noted before, holders who tendered their notes were required to deliver their consents to the proposed amendments and waivers at the same time. However, holders could deliver consents without tendering their notes.

Holders who tendered their notes at or prior to 5 p.m. ET on Sept. 29, the early tender deadline, will receive a total consideration of $700 per $1,000 principal amount of notes. The total consideration includes an early tender consideration of $680 and a consent payment of $20 for consents delivered by the consent expiration date, which is also 5 p.m. ET on Sept. 29.

Holders who tendered their notes after the early tender deadline and on or prior to the expiration date, 11:59 p.m. ET on Oct. 14, will be entitled to receive the tender consideration of $650 per $1,000 of notes, which is the early tender consideration less a $30 early tender payment.

Holders who tendered their notes after the early tender deadline will not be entitled to the consent payment.

Holders who delivered their consents by the consent expiration date without tendering their notes will receive the $20 consent payment per $1,000 of notes.

The company said before that proration will not be applied to any consents delivered. Holders will receive the consent payment with respect to all notes for which a consent is delivered, regardless of which notes the company accepts for purchase under the tender offer.

The company will also pay accrued interest on notes accepted for purchase.

The withdrawal deadline was 5 p.m. ET on Sept. 29. As of that deadline, holders had tendered $196,232,000, or 51.64%, of the notes and delivered consents for $324,144,000, or 85.3%, of the outstanding principal amount.

Notes had to be tendered in minimum denominations of $100,000 principal amount and multiples of $1,000 in excess of that.

Had the company received tenders for more than the maximum amount, it would have scaled the accepted notes on a pro rata basis.

The company said it will fund the tender offer with cash on hand and bank borrowings.

D.F. King & Co., Inc. (800 829-6554 or 212 269-5550, +44 20 7920 9700, hidili@dfking.com/hidili) is the information and tender agent. The dealer manager is UBS AG, Hong Kong Branch (852 2971 6159 or ol-lm-Asia@ubs.com).

The coal and coke company is based in Panzhihua, China.

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