China Sun Bio-chem, convertible holders reach no consensus on default

By Angela McDaniels

Tacoma, Wash., Nov. 12 - China Sun Bio-chem Technology Group Co. Ltd. made a tentative proposal to settle an event of default that occurred under its $100 million of zero-coupon convertible bonds due 2011 that was not accepted by the holders.

As previously reported, the company said on Oct. 26 that it received a notice confirming an event of default from BNY Corporate Trustee Services Ltd. and that the trustee may declare the convertibles due at the early redemption amount upon the direction of holders of 25% or more of the outstanding convertibles.

At the time, holders had put $87.3 million of the convertibles.

The company and the holders met on Monday to discuss a restructuring of the terms and conditions of the bonds.

When executive chairman and chief executive officer Sun Guiji presented the tentative proposal, the holders instead proposed the appointment of an independent financial adviser to determine the accounting and financial position of the company.

China Sun, a Beijing-based investment holding company, said its board of directors will hold a meeting to discuss this proposal.

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