China Nickel holder agrees to forgo exercising put right for 15% of convertibles due 2012

By Jennifer Chiou

New York, April 23 - China Nickel Resources Holding Co. Ltd. announced that a holder of about 15% of the outstanding amount of its original HK$2 billion of zero-coupon convertible bonds due 2012 has agreed to bypass the option to put back the securities.

The holder is in possession of HK$210.7 million.

China Nickel requested agreement from holders prior to 4 a.m. ET on April 22.

As already reported, that followed the cancellation of a Feb. 5 meeting at which the company was intending to ask holders to remove their right to require the company to redeem the bonds on Dec. 12, 2010. The company had called the meeting on Jan. 13.

In exchange, the company will pay HK$20,000 in cash to investors who agree for each HK$100,000 principal amount of convertibles that they hold. The consent consideration is to be paid on Nov. 12, 2010.

The company said in a prior news release that the purpose of this agreement is to ensure that it maintains sufficient working capital.

On the early redemption date in December, holders will be able to put back their bonds at a rate of HK$117,676.84 per HK$100,000 principal amount of bonds.

The extraordinary resolution previously requested was to be subject to approval from the Stock Exchange of Hong Kong Ltd.

The agent was Deutsche Bank AG, Hong Kong Branch (852 2203-7863).

China Nickel is a Hong Kong-based steel producer, and questions may be directed to the company at 852 2110-0836.

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