Boyuan seeks to extend 10% convertibles to 2018, trim conversion price

By Toni Weeks

San Luis Obispo, Calif., Jan. 22 – Boyuan Construction Group, Inc. will seek approval from holders of its 10% convertible unsecured subordinated debentures due Oct. 31, 2015 to amend the terms of the debentures. The debentures were issued on Nov. 4, 2010.

According to a press release, the company wants to extend the maturity date to Oct. 31, 2018 from Oct. 31, 2015, reduce the conversion price to $1.00 per share from $2.60 per share and increase the coupon to 10.5% from 10%. It is also seeking to extend the restricted redemption period to Oct. 31, 2016.

Boyuan needs approval from holders representing at least 75% of the principal amount of the debentures to pass the amendments.

“By extending the maturity of the debentures, the company would be provided with increased financial flexibility to capitalize on the attractive growth opportunities that have been procured by the company’s management team,” chief financial officer Paul Law said in the press release.

“In addition, we believe that the amendments will provide debentureholders with a longer period of time during which to receive what we believe to be an attractive yield.

“Based on the current low-interest-rate environment, we believe that the 10.5% coupon provides returns that are superior to other convertible debentures investments in the Canadian market.”

The debentureholder meeting will be held on Feb. 24 for holders of record as of Jan. 21.

Boyuan also announced that, subject to approval of the Toronto Stock Exchange and the approval of the amendments, it intends to make a normal course issuer bid for the debentures.

“There were times over the last four years where the trading price of our debentures did not reflect what we believed to be fair value,” Law stated.

“As a result, we believe than a normal course issuer bid for the debentures will allow us to take advantage of scenarios where, in the opinion of our management team, the debentures appear to be underpriced.”

Boyuan is a Jiaxing City, China-based builder of commercial, residential and municipal infrastructure.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.