China Oriental lifts tender offer cap for 7%, 8% notes, sets pricing

By Marisa Wong

Madison, Wis., Oct. 29 - China Oriental Group Co. Ltd. said that as of 5 p.m. ET on Oct. 26, the early deadline of its repurchase offer, holders tendered $87,117,000 of its 7% senior notes due 2017 and $59,417,000 of its 8% senior notes due 2015.

The company announced on Oct. 15 an offer to repurchase for cash up to $100 million total of its $300 million of outstanding 7% notes and $550 million of 8% notes.

Given the amount of notes tendered by the early tender deadline, the company increased the tender offer cap to $200 million, effective as of Oct. 29.

As noted before, the company intends to repurchase the 7% notes first. If the amount of tendered 7% notes does not exceed the offer cap, then the company will begin repurchasing 8% notes.

Also effective as of the early deadline, the price for 7% notes accepted for repurchase has been set at $880 per $1,000 principal amount.

The company announced at the start of the offer that the tender offer price for the 7% notes would range from $845 to $880 and would be determined by a modified Dutch auction procedure.

The tender offer price for the 8% notes is $950 per $1,000 principal amount, as previously reported.

Holders who tendered their notes by the early tender deadline will receive the tender offer price, which includes a $20.00 premium per $1,000 principal amount of notes.

Holders who tender their notes after the early tender deadline will not be eligible to receive the early tender premium.

The company said it will pay accrued interest for notes accepted for repurchase.

The offer will expire at 5 p.m. ET on Nov. 9. Settlement is slated for Nov. 15.

Notes can no longer be withdrawn.

The company said the purpose of the offer is to reduce its outstanding debt. It plans to use available cash and bank borrowings to fund the repurchase.

Deutsche Bank AG, Singapore Branch is the dealer manager, and Lucid Issuer Services Ltd. is the information and tender agent.

China Oriental is an iron and steel producer is based in Hong Kong.

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