Li & Fung launches tender offer, consent bid for 4 3/8% notes due 2024

By Marisa Wong

Los Angeles, Oct. 27 – Li & Fung Ltd. is inviting holders of its $500 million 4 3/8% notes due 2024 (ISIN: XS2059681135) to tender their notes for repurchase for cash and consider a proposed amendment to the terms and conditions of the notes.

Specifically, the proposed amendment would insert a new condition entitling the company to redeem all of the outstanding notes at 89% of par by giving no fewer than five business days’ notice.

The extraordinary resolution containing the proposal may be approved by electronic consent or, if electronic consent has not been given, at a meeting of noteholders.

The company is offering an early tender consideration of $940 per $1,000 principal amount.

The early tender consideration includes a consent fee of $50 per $1,000 of notes tendered by 5 p.m. ET on Nov. 9, the early deadline.

Holders tendering after the early deadline are only eligible to receive the tender consideration of $890 per $1,000 principal amount.

The company will also pay accrued interest to but excluding the applicable settlement date.

All holders submitting tender instructions will be deemed to have voted in favor of the extraordinary resolution under the consent solicitation.

Consent details

Approval by electronic consent means consent instructions approving the extraordinary resolution have been submitted electronically by holders of at least 75% of the outstanding notes by the early deadline.

Both ineligible and eligible holders may submit a consent instruction. However, consent instructions submitted by ineligible holders will not be counted for the purposes of passing the extraordinary resolution.

An eligible holder is a holder who is either a qualified institutional buyer under Rule 144A of the U.S. Securities Act of 1933 or located outside the United States.

All consent instructions must be submitted on or prior to the early deadline; any instructions submitted after the early deadline will not be accepted.

If electronic consent has not been obtained, the extraordinary resolution will be tabled at a meeting at the offices of Clifford Chance in Hong Kong.

The quorum required for the meeting is two or more persons holding at least 75% of the aggregate principal amount outstanding. The extraordinary resolution requires a majority in favor consisting of at least 75% of the persons voting.

The consent fee is payable to eligible holders who submit consent instructions by the early deadline.

The instruction fee, equal to the consent fee, is payable to ineligible holders who submit consent instructions by the early deadline.

Timing

Early results are expected to be announced on Nov. 11.

If electronic consent is granted, the proposed amendment will take effect and early tendered notes will settle on Nov. 14.

The tender offer expires at 5 a.m. ET on Nov. 28, and tender results are expected to be announced on Nov. 29.

If electronic consent is granted, final settlement will be on Nov. 30.

If electronic consent is not granted, the noteholders’ meeting will be held at 5 a.m. ET on Nov. 30, and final results will be announced on Dec. 1, with settlement to occur on Dec. 2.

Citigroup Global Markets Ltd. (+852 2501 2693; liabilitymanagement.asia@citi.com), DBS Bank Ltd. (+852 2806 5325, liabilitymanagement@dbs.com), MUFG Securities Asia Ltd. (+33 1709 14279/ +852 2860 1609; liabilitymanagement@mufgsecurities.com) and Standard Chartered Bank (+852 3983 8657; Asia-Liability.Management@sc.com) are the dealer managers.

Morrow Sodali Ltd. (+852 2319 4130, +44 20 4513 6933, 203 609-4910; lifung@investor.morrowsodali.com; https://projects.morrowsodali.com/lifung) is the information, tender and tabulation agent.

Assuming the extraordinary resolution passes, the company intends to exercise the early redemption option for any notes not purchase in the tender offer no later than Dec. 31.

The notes were originally issued in two tranches of $400 million and $100 million on Oct. 4, 2019 and Oct. 29, 2019, respectively.

Li & Fung is a global trading group based in Hong Kong.

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