China’s Zhuguang, noteholders agree to extend maturity date of 11% notes; new notes possible

By Rebecca Melvin

New York, Aug. 2 – Zhuguang Holdings Group Co. Ltd. said it has agreed with most of the holders of its $500 million of 11% senior notes to extend the maturity date of the three tranches to Sept. 22, 2019 from Aug. 3, 2019.

The extension is needed because the company may need additional time to fulfill payment under the first tranche, according to a company news release.

The company, the controlling shareholder, the ultimate shareholders, the obligors, Blooming Rose Enterprise Corp., Heroic Day Ltd. and CCB International Overseas Ltd. have agreed to the extension. These investors hold at least 85% of the senior notes that priced Aug. 3, 2016.

The parties have entered into an amendment and supplement of the terms and conditions under which the maturity date was extended, and the company was given the ability to give only three business days’ notice regarding voluntary redemption instead of the previous requirement of not less than three months’ notice.

In addition, the company is negotiating with certain potential independent third-party investors in regard to the possible issue of new notes by the company.

Zhuguang is an investment holding company based in Hong Kong that operates in property sales and rentals. It priced $500 million of 11% notes in three tranches under a note purchase agreement in 2016. The company also issued warrants to the investors at that time, representing an aggregate exercise of up to $75 million, with $28.5 million allotted to the first-tranche investors, up to $33 million to the second-tranche investors and up to $13.5 million to the third-tranche investors.

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