Shenzhen International cuts conversion price on 0% convertible bonds

By Marisa Wong

Madison, Wis., Dec. 3 - Shenzhen International Holdings Ltd. said that it adjusted the conversion price on its HK$1.73 billion zero-coupon convertible bond.

The conversion price will be lowered to HK$0.78 from HK$1.20, effective when all of the conditions to a previously announced modification deed have been fulfilled. The conditions have to be satisfied by Dec. 29.

The company entered into a modification deed with Shenzhen Investment Holdings Co. Ltd. on Nov. 11 to amend certain terms of the convertible.

Under the existing terms of the convertible, Shenzhen Investment may convert the outstanding principal amount in whole or in part at any time by Dec. 29. Because the original conversion price is significantly higher than the current market price - 182% of the closing share price on Nov. 10 - Shenzhen Investment said it is unlikely to convert the bond at the initial rate. If Shenzhen Investment does not elect conversion, Shenzhen International would be required to repay the outstanding principal amount of the bonds on Dec. 29.

The revised conversion price represents a 17.12% premium over the average closing price of HK$0.666 per share for the five trading days ending Nov. 10.

Shenzhen is a logistics and transportation company based in Tsimshatsui, Hong Kong.

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