Shimao’s Crystal Idea seeks to waive put right under 2.25% convertibles

By Marisa Wong

Los Angeles, July 6 – Shimao Services Holdings Ltd. announced a consent solicitation in relation to the HK$3.11 billion 2.25% convertible bonds due 2022 (ISIN: XS2401670349) issued by wholly owned subsidiary Crystal Idea Group Ltd. The bonds are guaranteed by Shimao.

The issuer is seeking consents to waivers of its redemption obligations triggered by a relevant event under the bonds and to amend its optional redemption right under the bonds.

As a result of delays in the publication of the company’s audited annual results for the year ended Dec. 31, 2021, trading of Shimao’s shares on the Stock Exchange of Hong Kong Ltd. was suspended on May 3. Trading resumed on June 23, once the audited annual results were published. However, the shares had been suspended for a trading period of 35 consecutive days, which constituted a relevant event under the terms and conditions of the bonds. A relevant event occurs if the company’s shares have been suspended for trading for a period of 30 days or longer.

Under the terms and conditions of the bonds, if a relevant event occurs, bondholders have the right to require the issuer to redeem all or some of their bonds. The issuer wants to waive this redemption obligation.

As of July 6, the date of the consent solicitation notice, the issuer intends to repay the principal amount of the bonds together with any accrued interest on the maturity date as scheduled.

Currently, Shimao’s only outstanding offshore debt is the convertible bonds, and there is no default or event of default under the bonds.

The issuer is offering a cash consent fee of HK$2,500 per HK$1 million principal amount, payable if the required majority of bondholders consent to the proposal.

The consent solicitation expires at 11 a.m. ET on July 27.

Holders will vote on the extraordinary resolution to amend the bonds at a meeting scheduled for 10 p.m. ET on July 31.

Results will be announced on Aug. 2. If the solicitation is successful, a supplemental trust deed will be executed on Aug. 3.

Payment of the consent fee is expected to be made on Aug. 4.

Kroll Issuer Services Ltd. (shimaoservices@is.kroll.com; https://deals.is.kroll.com/shimaoservices; attn.: Mu-yen Lo / Harry Ringrose) is the tabulation and information agent.

Shimao Services is a Shanghai-based property manager and a member of the Shimao Group.

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