Dexin China receives exchange offer response of 77.66% at deadline

Chicago, Dec. 12 – Dexin China Holdings Co. Ltd. announced the results and the end of its exchange offer and consent solicitation for a minimum of $313.47 million, or 90%, of its $348.3 million outstanding 9.95% senior notes due 2022 (ISIN: XS2262084374) for new notes and cash.

At the extended expiration deadline of 11 a.m. ET on Dec. 9, the company received tenders for $270,486,000, or 77.66% of the notes.

The minimum condition had not been met.

The company is considering next steps and will provide further updates as soon as practicable once a decision is made.

The offer

The company was offering an exchange consideration per $1,000 of existing notes of $975 of new notes, $25 upfront principal payment in cash, $5 consent fee in cash, accrued interest and capitalized interest.

The new notes will be dollar-denominated senior notes due 2024.

Accrued interest was initially going to be paid six months after the original issue date. Dexin moved up the payment date, to better the terms, to Feb. 15, 2023.

There was also a mandatory redemption on the notes whereby the company had to redeem 10% of the notes on the 12-month anniversary and 25% on the 18-month anniversary. These redemption amounts were increased to 20% and 40%, respectively.

Furthermore, Hu Yiping, the company’s executive director and chairman, provided a personal guarantee on the obligations under the new notes.

Settlement of the new notes and delivery of the exchange consideration was expected to occur on Dec. 14.

The new notes will be listed on the Singapore Exchange on Dec. 15, should the company go forward with the exchange.

There was a revocation deadline of 11 a.m. ET on Dec. 2.

Notes

As previously reported, the company said it believes that the exchange offer, if successfully completed, can improve its financial condition, extend its debt maturity profile and improve its cash flow.

To facilitate the implementation of a restructuring of the existing notes, the company may, as an alternative to the exchange offer, consider launching a scheme of arrangement in Hong Kong to effect a restructuring of the notes on terms similar to the exchange offer but open to all holders, including U.S. persons under Regulation S of the U.S. Securities Act of 1933.

If the exchange offer is not completed and the scheme is launched instead, each eligible scheme creditor will receive on the restructuring effective date in cash an amount equal to a 2.5% cash prepayment fee and a 0.5% instruction fee, if the consenting creditor enters into the restructuring support agreement on or before the cash prepayment fee deadline at 11 a.m. ET on Dec. 12, moved back from Dec. 1.

The company appointed Guotai Junan Securities (Hong Kong) Ltd. and CCB International Capital Ltd. as its dealer managers.

Sidley Austin is its legal adviser.

Morrow Sodali Ltd. (+44 20 4513 6933, +852 2319 4130; dexin@investor.morrowsodali.com; exchange website: https://projects.morrowsodali.com/dexin; RSA accession portal: https://portal.morrowsodali.com/dexin; RSA transfer portal: https://portal.morrowsodali.com/dexinTRANSFER) is the information and exchange agent.

The company is a Zhejiang, China-based investment holding company. Its subsidiaries are involved in construction services and property development.

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