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Hong Kong's China New Town proposes exchange offer for 17¾% notes
By Angela McDaniels
Tacoma, Wash., June 3 - China New Town Development Co. Ltd. plans to hold an exchange offer for its RMB 593.3 million dollar-settled 17¾% senior notes due 2011, according to a company news release.
The company said the noteholders have agreed to enter into discussions about the proposed transaction, which would involve the purchase of RMB 505.94 million principal amount of notes.
Under the proposed terms of the offer, holders would receive the dollar equivalent of RMB 600 and 349.07 new ordinary shares for each RMB 1,000 principal amount of notes. Holders would also receive accrued interest up to and including July 31 in the form of 250.67 shares per note.
The offer would be financed with internal resources and loans from executive chairman Shi Jian, who would accept new ordinary shares or convertible debt instruments in lieu of repayment of those loans.
In order to facilitate discussions, each noteholder has agreed not to sell, offer or otherwise dispose of any of the notes without the prior written consent of the company until the earlier of July 31 and the termination of the discussions between the noteholders and the company.
China New Town said some of the noteholders, namely Highbridge and Och-Ziff, have agreed in principle to sell all of their notes to the company, and Forum has agreed in principle to sell 50% of its notes.
After the completion of the proposed offer, the principal amount of the notes would be RMB 87.36 million.
Any exchange offer would be subject to shareholder approval.
The company is a Hong Kong-based new town developer in the People's Republic of China.
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