RiseSun Real Estate extends consent bid for 9˝% notes due 2023, 2024

By Marisa Wong

Los Angeles, Oct. 25 – RiseSun Real Estate Development Co., Ltd. extended the expiration deadline of its Oct. 11 consent solicitation relating to the 9˝ senior notes due 2023 (ISIN: XS2420457348) and the 9˝% senior notes due 2024 (ISIN: XS2420457421), according to a company announcement.

The deadline was extended to 11 a.m. ET on Nov. 2 from 11 a.m. ET on Oct. 25.

The settlement date was also extended to Nov. 7 from Oct. 28.

Previous details

There are $199,341,233 of the $200,715,000 notes due 2023 outstanding and $531,289,517 of the $540 million notes due 2024 outstanding.

RiseSun is soliciting consents to obtain the proposed waivers under each of the indentures in order to improve the company’s liquidity and cash flow management.

The company failed to make interest payments on Sept. 16 and Sept. 17 for the 2023 notes and 2024 notes, respectively.

The company is still in the 30-day grace periods for the potential defaults. The company does not know if it will have enough cash to make the interest payment before the grace period has expired.

Any default would trigger a cross-default.

The company is working on generating sufficient cash flow to meet its financial commitments, including, among others, through extension of existing credit facilities, opportunistic financing and expenditure conservation.

RiseSun has been working with certain holders, who have suggested that the company consider a potential restructuring, whether the consent solicitation succeeds or fails.

The company may work on a restructuring plan after the consent solicitation should its liquidity not improve by March 2023, when those notes are due.

Specifically, the company is asking noteholders to waive the default and allow payment of the interest that was due in September on March 16, 2023, the maturity date for the 2023 notes, and March 17, 2023 for the 2024 notes. The company is also asking noteholders to waive all past events of default.

The proposed waivers constitute a single proposal for each series.

Noteholders who deliver consents will receive $2.50 per $1,000 principal amount of notes for which they deliver consents, subject to the satisfaction of the requisite consent condition.

Haitong International Securities Co. Ltd. is the solicitation agent (+852 2840 1680, project.risesun.lm@htisec.com).

Morrow Sodali Ltd. (+44 20 4513 6933, +852 2319 4130, risesunconsent@investor.morrowsodali.com, https://projects.morrowsodali.com/ risesunconsent) is the information and tabulation agent.

The issuer is a property developer in China.

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