China’s Shandong Sanxing offers to exchange January 2021 notes

By Cady Vishniac

Detroit, Dec. 7 – Shandong Sanxing Group Co. Ltd. has announced an offer to exchange at least $180 million of its $200 million outstanding of 7.99% senior notes due 2021 (ISIN: XS1733826181) issued by subsidiary Knight Castle Investments Ltd. for new Regulation S notes with an extended maturity date, according to an announcement.

For each $1,000 of notes tendered, the company will offer $150 in cash, $850 in new notes and interest in cash.

The company expects that it will not be able to repay the notes at maturity due to the financial impact of the Covid-19 pandemic. For this reason, noteholders are being offered the opportunity to exchange their existing notes for new notes with an extended maturity date.

No tenders of notes will be valid unless the noteholder tenders all notes in their possession and delivers their consent to a restructuring support agreement with the notes. Should the company not succeed in exchanging $180 million of the 2021 notes for new notes with an extended maturity date, it may attempt to restructure the existing 2021 notes to extend their maturity according to the terms of a restructuring support agreement.

The deadline for both tenders of existing notes and consents is 11 a.m. ET on Dec. 17. Should the company receive a large enough principal amount of tendered notes for the exchange offer to be consummated, noteholders who tender their notes by the Dec. 17 deadline will receive $10 in cash per $1,000 of notes tendered. Should the company go through with the restructuring of the notes instead, holders who submit their consents by this deadline will receive an instruction fee in the amount of 1% of the principal amount of notes held.

The company plans to announce the amount of notes tendered for exchange as soon as possible after the tender deadline and settle the offer on or about Dec. 23, with the new notes being listed on the Singapore Exchgange Dec. 24.

The dealer manager for the exchange offer is Admiralty Harbour Capital Ltd. (sanxing@ahfghk.com).

The exchange and tabulation agent is D.F. King Ltd. (+44 20 7920 9700, +852 3953 7208, sanxing@dfkingltd.com, https://sites.dfkingltd.com/sanxing).

Proceeds will improve Shandong Sanxing’s financial condition and cash flow management, extend its debt maturity profile and strengthen its balance sheet.

Binzhou, China-based Shandong Sanxing processes and distributes edible oil products.

© 2015 Prospect News.
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