REXLot extends time to repay some bonds under first step to Jan. 23

By Sarah Lizee

Olympia, Wash., Jan. 9 – REXLot Holdings Ltd. again extended the timeline for redeeming some of its bonds and loans under an agreement to repay all its outstanding offshore liabilities including its overdue debt.

The deadline for completing step A of its debt repayment plan was extended to Jan. 23 from Jan. 10, according to a company update on Wednesday.

The company said that due to the arrangement of direct settlement with a major bondholder and renunciation by its custodian, the relevant parties including the bank, clearing system, custodian and trustee require additional time for administrative works to effect the partial redemption of the bonds and partial repayment of the shareholder’s loan.

As previously reported, the agreement was reached with Chan How Chung, who is a substantial shareholder and an executive director of the company, Keen Start Ltd., a company indirectly owned by Chung, and Kingly Profits Corp., a company also indirectly owned by Chung.

Keen Start will complete the agreed purchase from bondholders of HK$26 million of the 6% convertible bonds due in 2017 and HK$111 million of the 4.5% convertible bonds due in 2019 plus accrued and default interest.

The company had previously extended the timeline from Dec. 14 and said that it would will complete step A by Dec. 21, which means using about HK$953 million in cash to partially redeem from any remaining bondholders some outstanding 2017 bonds with an aggregate principal amount and accrued interest and default interest of about HK$95 million; partially redeem some 2019 bonds with an aggregate principal amount and accrued interest and default interest of about HK$505 million; and partially repay the shareholder's loan with a principal amount and accrued interest of about HK$353 million.

“Given the significant amount of money involved,” the bank needs more time to go through internal procedures to make the partial redemption of the bonds, the company said in a previous notice.

As previously reported, the company and Chung were to negotiate a plan to repay the company’s remaining offshore debt. Currently the company’s debt includes offshore borrowings of HK$1.14 billion made up of HK$100.91 million of bonds due in 2017, HK$551.40 million of bonds due in 2019, a shareholder loan plus accrued interest of HK$417.68 million and accrued interest on the bonds of HK$15.57 million.

Debt repayment schedule

About two weeks after the restructuring plan has been finalized, the company was to use HK$953 million in cash to pay down its debt, including HK$95 million to pay principal and interest on some of the 2017 bonds held by Keen Start and other holders, HK$505 million to pay principal and interest on some of the 2019 bonds held by Keen Start and other holders and HK$353 million to partially repay principal and interest on the shareholder loan.

Four weeks later Keen Start will offer to purchase the remaining outstanding bonds.

Two weeks after that, REXLot will solicit consents for a waiver of the defaults on the bonds.

At the end, Chung and his associates will hold all of the remaining outstanding bonds and the shareholder loan, making up the company’s remaining debt.

REXLot noted that the principal on the 2017 bonds has been overdue since April 28, 2017 and the shareholder loan is payable on demand when a convertible bond subscription is completed or terminated.

Meanwhile Keen Start has been offering to buy the convertibles at par plus accrued interest in an offer that has been extended.

Based in Hong Kong, REXLot provides machines and services to the Chinese lottery market.

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