Hong Kong's Sun East negotiates restructuring of floaters due 2009

By Angela McDaniels

Tacoma, Wash., Aug. 12 - Sun East Group Ltd. said it reached a conditional agreement with the holders of its $15 million secured floating-rate notes due Jan. 29, 2009 to restructure the notes.

The company has been negotiating the restructuring with the noteholders, Ma Ong Kee and Sam Kok Yin, since it failed to repay the notes at maturity.

The total amount outstanding under the notes is more than S$19 million, according to a company announcement.

Under the terms of the agreement:

• S$6 million of the existing debt will be converted into a new zero-interest, two-year loan;

• The remainder of the existing debt will be converted into ordinary shares of the company at the conversion price of S$0.008 per share; and

• The noteholders will be given a three-year option to subscribe for a number of shares equal to the number they receive in the conversion, also at S$0.008 per share. They can use the new loan to subscribe for these shares.

The completion of the restructuring is subject to conditions that include the receipt of shareholder approval.

Sun East is a consumer brand development and management company based in Hong Kong.

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