China’s Yestar asks holders to accede to restructuring of $200 million 6.9% notes

By Wendy Van Sickle

Columbus, Ohio, July 20 – Yestar Healthcare Holdings Co. Ltd. is proposing to restructure its $200 million of 6.9% senior notes due Sept. 15, 2021 at par, according to a company announcement.

The notes were issued in 2016.

The group said it had a difficult year in 2020 as a result of the outbreak of the Covid-19 pandemic.

During the first half of 2020, most hospital resources were reserved to combat Covid-19, which caused a plunge in demand for in vitro diagnostic equipment installment and related consumables, and the group recorded decreased revenue and profit in 2020 compared to 2019, according to the announcement.

The company said it has had constructive dialogue with creditors, including noteholders, and advisers.

The issuer is now proposing a restructuring, which is expected to be implemented through a scheme of arrangement in the Cayman Islands.

In order to support the implementation of the restructuring, the company and its subsidiary guarantors entered into a restructuring support agreement on July 20, and noteholders are now being asked to accede to the RSA in exchange for a cash consent fee.

Under the terms of the RSA, the company and its guarantors must use their best effort to have a scheme effective date and fully implemented restructuring by Sept. 15 or such later date, as extended, but no later than Dec. 31.

By giving their consents, creditors irrevocably agree to allow the company to take all actions necessary to vote all of the notes in which it holds a beneficial interest in favor of the Cayman scheme at a scheme meeting. Consenting creditors must also agree not to take any enforcement action to delay the scheme effective date or to interfere with the implementation of the proposed restructuring and/or the Cayman scheme.

Further, consenting creditors agree to provide reasonable support and assistance to the company to prevent the occurrence of any insolvency proceeding and not object to the Cayman scheme or any application to the Cayman Court in respect the proposed restructuring.

Noteholders who give their consents by the early bird deadline, 5 a.m. ET on Aug. 3, will be eligible to receive a consent fee of $20 per $1,000 principal amount, which includes a $10 early bird fee that will not be paid to holders who deliver their consents after the early deadline.

The final consent deadline is 5 a.m. ET on Aug. 17.

The consent fee and early bird fee will be payable on the restructuring effective date.

In order to receive a consent payment, holders must deliver an accession deed and initial restricted notes notice by the deadlines listed, vote in favor of the Cayman scheme at the scheme meeting and not have exercised their right to terminate the RSA or have breached any provision.

D.F. King Ltd. (+44 20 7920 970, 852 3953 7208 or yestar@dfkingltd.com) is the information agent.

Yestar is a Shanghai-based supplier of medical consumables for the in vitro diagnostic market and a manufacturer and distributor of medical imaging products.

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