China Nickel asks convertibles holders to forgo exercising put right

By Jennifer Chiou

New York, April 15 - China Nickel Resources Holding Co. Ltd. announced that it is asking holders to bypass their option to put back their original HK$2 billion of zero-coupon convertible bonds due 2012.

This follows the cancellation of a Feb. 5 meeting at which the company was intending to ask holders to remove their right to require the company to redeem the bonds on Dec. 12, 2010. The company had called the meeting on Jan. 13.

China Nickel is requesting agreement from holders prior to 4 a.m. ET on April 22.

In exchange, the company will pay HK$20,000 in cash to investors who agree for each HK$100,000 principal amount of convertibles that they hold.

The consent consideration will be paid on Nov. 12, 2010.

The company said in a news release that the purpose of this agreement is to ensure that it maintains sufficient working capital.

On the early redemption date in December, holders will be able to put back their bonds at a rate of HK$117,676.84 per HK$100,000 principal amount of bonds.

The extraordinary resolution previously requested was to be subject to approval from the Stock Exchange of Hong Kong Ltd.

The agent is Deutsche Bank AG, Hong Kong Branch (852 2203-7863).

China Nickel is a Hong Kong-based steel producer, and questions may be directed to the company at 852 2110-0836.

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