China's Winsway adds consent-only option to tender offer for 8½% notes

New York, Sept. 24 - Winsway Coking Coal Holdings Ltd. amended its tender offer for its $460.6 million of outstanding 8½% senior notes due 2016 to add an additional option under which holders can give consents only without tendering.

The company announced the change after failing to receive a sufficient response to allow it to amend the notes under the original terms.

By the tender deadline of 11:59 p.m. ET on Sept. 23, Winsway had received tenders for $182.1 million of notes, or 39.54% of the total.

That response was up slightly from $165.1 million, or about 35.85%, that were recorded at the early tender deadline of 5 p.m. ET on Sept. 5.

Under the new alternative C for the offer, holders may deliver consents only and receive a consent payment of $25 per $1,000 principal amount of notes.

Winsway also extended the expiration to 11:59 p.m. ET on Oct. 8.

In order to meet the consent condition, the company needs the participation of holders of 50.01% of the notes, 10.47% more than at present.

On Sept. 9, Winsway announced the early tender results and amended the offer to extend the expiration until 11:59 p.m. ET on Sept. 23 from 11:59 p.m. ET on Sept. 19. The offer began on Aug. 20 and settlement was originally slated for Sept. 24.

At the same time, the company said that all holders who tender and deliver consents will receive the consent payment of $25 for each $1,000 of notes, not just those who tender before the early deadline.

The company also waived the commercial condition to the tender offer that required tenders of at least 75% of the outstanding notes, according to a press release.

In the consent solicitation, Winsway is seeking to eliminate substantially all restrictive covenants and some events of default contained in the indenture.

Under the original terms, holders who tendered their notes had to deliver their consents and vice versa.

As previously announced, the company was originally offering holders one of two choices:

• Alternative A is for holders who intend to tender the entire amount of "alternative A participating notes."

Under this option, holders who tender by the early tender deadline will receive a total payment of $450 per $1,000 principal amount of notes. The total payment includes a $25 consent payment; or

• Alternative B is for holders who intend to retain 25% of "alternative B participating notes."

In order to select this option, holders have to (i) notify the tender agent of the amount of alternative B participating notes they wish to tender, (ii) agree to have the entire amount of alternative B participating notes be blocked until the earlier of the settlement date and termination of the offer, (iii) agree to tender 75% of the entire amount of alternative B participating notes and retain ownership of the remaining 25% and (iv) agree to deliver consents for the entire amount of the alternative B participating notes.

The total payment under alternative B is $350 per $1,000 of notes and includes a $25.00 consent payment for notes.

The company will pay accrued interest under both alternatives.

The participating notes are the notes that holders wish to use in the tender offer and consent solicitation.

The company said the purpose of the offer is to reduce its overall debt and future interest expense and to improve its financial position.

Deutsche Bank AG, Singapore Branch (44 20 7545 8011, +65 6423 5342, attn.: liability management group, liability.management@db.com) is the dealer manager for the tender offer and consent solicitation. Lucid Issuer Services Ltd. (44 20 7704 0880, attn.: David Shilson, winsway@lucid-is.com) is the tender and information agent.

The company issued $500 million of the 8½% notes in April 2011. The current outstanding principal amount excludes the $39.5 million held by the company and its affiliates.

Winsway is a Hong Kong-based importer of coking coal, particularly from Mongolia.

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