China’s Yanzhou tenders for $250 million 5.73% notes by Dutch auction

By Susanna Moon

Chicago, Nov. 16 – Yanzhou Coal Mining Co. Ltd. said it began a tender offer for up to $250 million principal amount of the $550 million 5.73% guaranteed notes due 2022 issued by Yancoal International Resources Development Co., Ltd.

The tender offer will end at 11:59 p.m. ET on Dec. 14, and the early tender deadline is 5 p.m. ET on Nov. 30. Settlement is expected to occur Dec. 21.

The bid price range in the offer has been set at $860 to $895, with pricing to be set by modified Dutch auction, according to a company notice.

Holders may tender their notes by the early tender deadline at prices within the bid price range or be deemed to have specified the minimum offer price.

Under the modified Dutch auction, Yancoal Resources will accept tenders in the order of lowest to highest tender prices specified by noteholders in increments of $2.50 per $1,000 principal amount, the release noted.

Yancoal will then select the single lowest price per $1,000 principal amount to allow the company to repurchase an aggregate principal amount of the notes equal to the maximum tender offer amount.

The company also will pay accrued interest.

Notes must be tendered in minimum denominations of $200,000 and integral multiples of $1,000 after that.

The offer will be funded by available cash and cash equivalents, and the offer is subject to a financing condition.

The purpose of the offer is to manage the amount of the group’s outstanding debt, the release noted.

Yancoal reserves the right following completion or termination of the offer, to offer to exchange or repurchase notes in individually negotiated transactions or in an offer extended to all holders, or to issue a new invitation for holders to exchange or tender the notes, the release added.

Deutsche Bank AG, Singapore Branch (+65 6423 5934 or +44 0 207 545 8011 or liability.management@db.com) is the dealer manager. Lucid Issuer Services Ltd. (+44 0 20 7704 0880 or yanzhoucoal@lucid-is.com) is the information and tender agent.

Yanzhou is a Zoucheng, China-based coal mining company. Yancoal is a Sydney, Australia-based coal mining company.

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