Munsun Capital holders agree to amend, extend 7.25% convertibles

By Sarah Lizee

Olympia, Wash., Aug. 1 – Munsun Capital Group Ltd., formerly known as China Precious Metal Resources Holdings Co., Ltd., said that bondholders voted to make amendments to its 7.25% convertible bonds due Aug. 4, 2019 at a meeting held Thursday.

Holders or representatives of HK$248,880,762 of the convertibles, or 79.8%, were at the meeting. All votes were in favor of the proposals.

Holders also agreed to a grace period, which will become effective Aug. 4.

As previously reported, the company was seeking consents from bondholders to agree to proposed amendments through a written resolution. The written resolution is subject to shareholders’ approval.

The convertible bonds were due and payable in full with accrued interest on Aug. 4, and the total payment would amount to about HK$329 million.

The company said that in view of tight cash and bank balances, it is expected that it would be difficult for the company to fulfill its obligations in full on Aug. 4.

The company proposed the following amendments:

• Extending the maturity of the convertibles to Sept. 30, 2021;

• Amending the interest rate to 8% per annum and the interest payment date to March 31 and Sept. 30 each year;

• Amending the conversion price to HK$0.088;

• Addition of a downward-only reset to the conversion price; and

• Addition of the partial redemption right which will be exercisable within the stipulated time periods at the option of the bondholder.

If the new proposals weren’t implemented, a grace period was not granted, or the company fails to pay the redemption amount, there would be an event of default under the bonds, which in turn would trigger the cross-default of other bank and/or other borrowings of the group.

Apart from the new proposals, the company said it was also exploring and considering other alternatives to ensure that its obligations under the convertibles could be fulfilled, such as other debt or equity financing, subject to the financial performance and conditions of the company and the then market conditions. However, as of the date of the original announcement, no concrete plan was concluded, the company said.

The Hong Kong-based precious metals mining and investment holding company sold HK$1,028,000,000 of the bonds in January 2013.

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