Malaysia's IOI ups consent fee, extends deadline ahead of noteholder meetings to OK demerger

By Marisa Wong

Madison, Wis., Sept. 17 - IOI Corp. Bhd. has amended the consent fee and the consent fee deadline under the consent solicitation relating to IOI Investment (L) Bhd.'s $600 million of 4 3/8% notes due 2022 and IOI Ventures (L) Bhd.'s $500 million of 5¼% guaranteed notes due 2015.

The consent fee is now $4.00 for each $1,000 principal amount of notes, increased from $2.00 per $1,000 of notes.

Noteholders who vote in favor of the demerger by 4 a.m. ET on Sept. 18, extended from 11 a.m. ET on Sept. 11, will be eligible to receive the consent fee.

On Aug. 29 IOI announced that separate meetings for holders of IOI Investment's 4 3/8% notes and holders of IOI Ventures' 5¼% guaranteed notes due 2015 will be held on Sept. 23.

Previously, noteholder meetings were held on July 22 and Aug. 7, but noteholders did not pass the extraordinary resolution presented at either meeting.

As before, IOI is seeking noteholder approval to demerge IOI Properties Group Sdn. Bhd. The company launched the new consent solicitation on Aug. 29.

The final voting deadline is on Sept. 18.

Payment of the consent fee is conditioned on the extraordinary resolution passing at the Sept. 23 meetings. Results of the meetings are expected to be announced on Sept. 24.

At least 75% of the votes cast must be in favor of the extraordinary resolution in order for it to pass at either meeting.

Citigroup Global Markets Ltd. is the consent solicitation agent, and HSBC Ltd. (+852 2822 4423 / +852 2822 1319, attn.: Thomas Li / Eric Cheng, thomasctli@hsbc.com.hk / erickkcheng@hsbc.com.hk) is the tabulation agent.

Previous meetings

Separate meetings were held on July 22 for the holders of IOI Investment's 4 3/8% notes due 2022 and the holders of IOI Ventures' 5¼% guaranteed notes due 2015.

Each meeting required a quorum of holders representing more than 50% of the principal amount of the outstanding notes. However, the quorum was not met, so the July 22 meetings were adjourned to Aug. 7.

The quorum for each adjourned meeting was simply one or more bondholders. In order for the proposal to pass at a meeting, at least 75% of the votes cast at that meeting had to be in favor of the proposal. The extraordinary resolution did not pass at the adjourned meetings.

On Aug. 7 IOI said its board of directors would further deliberate its next course of action.

As noted before, the demerger is expected to be completed in the fourth quarter of 2013. Upon demerging, the property development business would be renamed IOI Properties Group Bhd.

IOI is a palm oil and property company based in Putrajaya, Malaysia.

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