Sino-Ocean gets votes for grace period at third meeting; first two meetings unsuccessful

By Marisa Wong

Los Angeles, Oct. 24 – Sino-Ocean Group Holding Ltd. disclosed the results of its bondholder meetings announced on Oct. 13 and then amended on Oct. 17 and Oct. 19, according to a notice on Tuesday.

The bondholders are holders of wholly owned subsidiary Sino-Ocean Holding Group (China) Ltd.’s corporate bonds due Oct. 19, 2025. As of Oct. 13, the balance of the corporate bonds is RMB 3 billion, and the current coupon rate is 4.76%.

The resolutions were not passed at the first two meetings, but the resolutions were passed at the third meeting.

First meeting

The first meeting was held from 9 p.m. ET on Oct. 17 to midnight ET at the end of the day on Oct. 18.

More than 96% of the votes cast were against the first three resolutions relating to exemptions of meeting deadlines and amendment of meeting rules, and more than 99% of the votes cast were against the fourth resolution, adding a grace period for the repayment of interest and providing credit enhancement measures.

Because less than 50% of the votes were cast in favor of each of the resolutions 1 and 3, the deadline for the notice and the convening procedure of the first meeting did not meet the relevant provisions of the bonds’ prospectus and the rules for bondholder meetings. As a result of the failure to validly convene the first meeting, resolutions 2 and 4 were not considered or passed.

Second meeting

The second meeting was convened from 9 p.m. ET on Oct. 15 to midnight ET at the end of the day on Oct. 18.

More than 93% of the votes cast were against the first resolution relating to exemption of meeting procedures, and more than 96% of the votes cast were against the second resolution relating to a grace period for the repayment of interest.

Because less than 50% of the votes were cast in favor of resolution 1, the deadline for the notice and the convening procedure of the second meeting did not meet the relevant provisions of the bonds’ prospectus and the rules for bondholder meetings. As a result of the failure to validly convene the second meeting, resolution 2 could not be considered or passed.

Third meeting

The third meeting was convened from 9 p.m. ET on Oct. 19 to 4 a.m. ET on Oct. 20.

Of the votes cast, 90.80701% were in favor of the first resolution, exemption of procedures for the notice of the third meeting and the provisional proposals.

Of the votes cast, 87.6883% were in favor of the second resolution, adding a grace period for the repayment of interest.

As more than 50% of the votes were cast in favor of each of the resolutions, both resolutions were passed.

Prior announcements

As previously reported, with the grace period resolution passed by the third meeting, the time of repayment of interest accrued during the period from Oct. 19, 2022 to Oct. 18, 2023 will be extended to on or before Oct. 26 as the date of completion of payment.

After passing of this resolution, the addition of a grace period – an extension from Oct. 19 to Oct. 26 – will not trigger the default provisions under the bonds.

If the interest due is repaid in full or waived or extended through a meeting of bondholders within that grace period, it will not constitute a default in respect of the bonds.

In addition, granting of a grace period means that no default interest will be imposed during the postponed repayment period for the interest; no default payment, overdue interest and default interest, among others, will be set up or incurred separately; and interest will continue to be payable at the current coupon rate.

Suspension of trading

On Tuesday, the company announced that trading for five series of bonds has been suspended with effect from Oct. 23. The suspension is due to an adjustment of the repayment arrangement for a series of corporate bonds issued by Sino-Ocean Holding Group (China), 18 Sino-Ocean 01 (security code: 143666).

The following bonds are affected:

• RMB 1.5 billion 5% bonds due Aug. 19, 2025 (15 Sino-Ocean 03 bonds);

• RMB 1.7 billion bonds due March 19, 2025 with a current coupon of 4.06% (19 Sino-Ocean 01);

• RMB 1.2 billion bonds due March 19, 2026 with a current coupon of 4.59% (19 Sino-Ocean 02);

• RMB 2.6 billion bonds due May 11, 2026 with a current coupon of 4.2% (21 Sino-Ocean 01); and

• RMB 1.95 billion bonds due Sept. 26, 2026 with a current coupon on 4.06% (21 Sino-Ocean 02).

The property developer is based in Hong Kong.

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