REXLot again extends deadline to repay bonds, this time to March 19

By Marisa Wong

Morgantown, W.Va., March 7 – Hong Kong’s REXLot Holdings Ltd. said the deadline for completing step A of its debt repayment plan has been further extended to March 19.

The company had previously agreed to complete the partial redemption of its 2017 and 2019 bonds and repay a portion of its shareholder loan by March 8.

In an announcement on Thursday, the company said it has been informed by its bank that due to several changes that have been made on the payment schedule and the significant amount of money involved, the bank needs more time to complete internal approval procedures to effect the partial redemption of the bonds and partial repayment of the loan.

The company added that it is also seeking legal advice on the implications of the bank’s prolonged delay in carrying out the company’s payment instruction if another delay occurs.

In a previous announcement, the company said it canceled its renunciation agreement with its major bondholder, because payment could not be made by March 1.

As a result, the company pushed the payment date for its bonds and loan to March 8.

As previously reported, the company had extended multiple times 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 had been extended to March 1 from Feb. 22 and, before that, from Feb. 14.

The deadline for completing step D of the agreement was extended to May 31, according to an earlier company update.

The company said it needed the extra time due to a direct settlement arrangement with a major bondholder. The payment to the bondholder was being processed pending all necessary documentation.

As previously reported, the repayment 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 Jan. 23. Before that, the company 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.

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.

About two weeks after the restructuring plan is finalized, the company is 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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