Greentown China gets waiver for $400 million 9% notes; holders tender $361.33 million

By Angela McDaniels

Tacoma, Wash., May 20 - Greentown China Holdings Ltd. said it received tenders from holders of $361,334,000 principal amount, or 90.3%, of its $400 million 9% senior notes due 2013 during a tender offer and consent solicitation that expired May 19.

The company also received consents from holders of $370,003,000 principal amount, or 92.5%, of the notes.

Holders who tendered their notes were deemed to have delivered consent. Holders were also given the option to submit consents without tendering their notes.

As previously reported, Greentown said an event of default occurred under the indenture when it incurred debt at a time when it was unable to satisfy the fixed charge coverage ratio and/or exceeded the maximum amount of debt allowed.

Greentown said that because of the anticipated delay in the completion of a number of its property projects and the adverse effect of the slowdown in the Chinese property market on its consolidated net profit in 2008, it significantly increased its bank borrowings and borrowings from its subsidiaries in 2008 in order to finance construction and other projects and the working capital requirements for committed projects.

The company was seeking to eliminate or modify substantially all of the restrictive covenants, some events of default and some additional provisions contained in the indenture governing the notes and to waive any defaults or events of default that have occurred or may occur. It needed consents from holders of a majority of the notes.

The supplemental indenture containing the proposed amendments and waiver has been executed and will become operative on the settlement date, which is expected to be May 26.

Holders who tendered by 5 p.m. ET on May 4, the consent date, will receive $850 for each $1,000 principal amount of notes - which includes a $775 purchase price, a $59 early tender payment and a $16 consent payment - plus accrued interest.

Holders who tendered after the consent date but before the offer expiration will receive the purchase price plus accrued interest.

Holders who delivered consents without tendering their notes will receive the consent payment only. They were required to deliver consents by the consent date.

The total amount to be paid to settle the offer is $308,713,057. The company previously said it planned to fund the offer, which began April 21, with internal resources.

Following settlement, $38,666,000 principal amount of notes will remain outstanding.

The dealer manager was Deutsche Bank AG, London Branch (+44 207 545 8011, +852 2203 8340 or +65 6423 8581), and the information, consent and tender agent was Lucid Issuer Services (+852 2526 5406, Attn: Glenda Chan).

Greentown is a Hangzhou, Zhejiang, China-based residential property developer.

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