China’s Wuzhou faces claims for convertibles, corporate bond payments

By Caroline Salls

Pittsburgh, Aug. 24 – Wuzhou International Holdings Ltd. announced Friday that an arbitration claim has been made by the holder of its 7% convertible notes due 2019 for the repayment of the outstanding principal and interest and default interest, which was allegedly required to be fully redeemed and paid on July 6.

According to a news release, the noteholder exercised its rights to request an early redemption of the notes, but Wuzhou failed to fulfill its redemption obligations.

The company said it received a notice from China International Economic and Trade Arbitration Commission on Aug. 20 regarding the payment failure.

The noteholder is requesting payment of $29.3 million in outstanding principal amount, as well as interest in an unspecified amount and $520,000 in default interest.

Wuzhou said it is seeking legal advice and assessing the merit of the arbitration claim.

In addition, the company’s directors said Wuzhou was not able to redeem RMB 10 million of its corporate bonds as required on Aug. 20 because of the financial difficulties of the group.

As a result, the company received a claim notice from the corporate bonds trustee on Thursday, demanding payments of the outstanding principal sum and interest within 30 days from Aug. 21.

Wuzhou said it is now exploring ways to remedy the default.

Trading of the company’s senior notes will remain halted until further notice, the release said.

The real estate company is based in Wuxi, China.

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