China’s Renhe Commercial wraps cash tender offer for 11¾%, 13% notes

By Marisa Wong

Madison, Wis., Dec. 31 – Renhe Commercial Holdings Co. Ltd. announced the final results of the cash tender offer and consent solicitation for its $300 million of outstanding 11¾% senior notes due 2015 and $600 million of outstanding 13% senior notes due 2016.

As of 5 p.m. ET on Dec. 30, the expiration of the offer, holders had tendered $221,291,000, or 73.8%, of the 11¾% notes and $438,802,000, or 73.1%, of the 13% notes.

Holders of 90.04% of the 11¾% notes and 94.63% of the 13% notes had delivered their consents.

As of the consent deadline at 5 p.m. ET on Dec. 8, holders of $219.54 million of the 11¾% notes and $432.55 million of the 13% notes had tendered and delivered consents.

The company confirmed on Wednesday that it received the necessary consents to amend the notes and said it will purchase all notes tendered. Payment will be made on Jan. 7.

As reported, the company solicited consents for amendments to the note indentures and waivers, which will eliminate substantially all of the restrictive covenants in order to provide increased financial and operating flexibility. The waivers will waive any and all actual defaults or events of default that may have or will occur under the indentures.

Following the consent deadline, Renhe said it tallied tenders and consents from holders of a majority of each series of notes and waived the 75% aggregate principal amount tender condition.

In a prior filing with the Singapore Exchange, the company said that as a result of its weak financial performance, ratings agencies have downgraded the notes’ ratings, including Standard & Poor’s to CCC from BB and Moody’s Investors Service to Caa3 from Ba2.

This downgrade makes it difficult for the company to raise additional capital through debt offerings in the international capital markets, the prior filing stated.

For each $1,000 principal amount of 11¾% notes, the company is offering $880 plus an early tender payment of $49.50, plus $0.50 for the total consent payment, which will constitute an early consent payment of $0.40 for the early consent payment and $0.10 for the consent payment.

For each $1,000 principal amount of 13% notes, the company is offering $770 plus an early tender payment of $49.50, plus $0.50 for the total consent payment, which will constitute an early consent payment of $0.40 for the early consent payment and $0.10 for the consent payment.

Renhe said in a recent filing that it will now pay the early tender payment to those who tender after the early deadline. The company will also pay accrued interest to the settlement date.

The minimum tender amount was $100,000.

In other news, the company already said it is looking to being a rights issue of shares at a subscription price of HK$0.32 apiece. It has waived certain conditions and will proceed with registration of the rights issue documents.

Deutsch Bank AG, Singapore Branch is the dealer manager. Syntax GIS Ltd. is the information agent.

Renhe Commercial Holdings is a Harbin, China-based developer and operator of underground shopping centers. It launched the offer on Nov. 24.

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