China's Lonking offers to repurchase up to $80 million of 8½% notes

By Marisa Wong

Madison, Wis., Sept. 7 - Lonking Holding Ltd. announced an offer to repurchase for cash up to $80 million of its outstanding $350 million 8½% senior notes due 2016.

The tender offer began on Friday will expire at 5 p.m. ET on Oct. 4.

Holders who tender by 5 p.m. ET on Sept. 20, the early tender date, will be eligible to receive the repurchase price, which includes an early tender premium. Holders who tender after the early deadline will receive the late tender amount, which is the repurchase price less the early premium.

The repurchase price will be determined by a modified Dutch auction procedure. The company will accept tenders in order of lowest to highest tender prices, in increments of $2.50, and will select the lowest price per $1,000 principal amount of notes that will enable it to purchase an aggregate principal amount of notes less than or equal to the tender cap.

If the amount of notes tendered prior to the expiration time and at or below the repurchase price exceeds the tender cap, the company will first accept for purchase all notes tendered at prices below the repurchase price and then the notes tendered at the repurchase price on a pro rata basis.

The company said the purpose of the offer is to reduce its overall debt and future interest expense, as well as to improve its financial position.

The offer will be funded with borrowings under the company's long-term bank credit facilities.

As of Sept. 7, the entire principal amount of the 8½% notes remains outstanding.

J.P. Morgan plc is the dealer manager, and Bondholder Communications Group, LLC (212 809-2663 or +44 20 7382 4580) is the information and tender agent.

Lonking is a construction machinery manufacturer based in Fujian, China.

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