Yida China revises exchange offer for 6.95% notes, extends deadline

By Rebecca Melvin

New York, March 17 – Yida China Holdings Ltd. announced that it is revising its exchange offer and consent solicitation for its $300 million of 6.95% notes due April 19, 2020 (ISIN: XS1598221338).

For each $1,000 principal amount of existing notes, the company is now offering $910 principal amount of the new notes and $90 in cash. Previously, the company was offering $920 principal amount of new notes and $80 in cash.

The tender offer deadline was extended to noon ET on March 23 from noon ET on March 16.

Yida previously extended the expiration deadline to March 16 from 11 a.m. ET on March 9.

Modifications of the new notes’ terms include requiring the company to make an offer to repurchase all outstanding new notes at 100% of their principal amount plus accrued and unpaid interest to but not including the repurchase date in the event that shares of the company cease to be listed or admitted to trading or are suspended from trading for a certain period on the Stock Exchange or an alternative stock exchange.

The modifications also require certain exempted “restricted payments” to be deducted from the “restricted payment” basket and increasing the threshold requirement of holders’ consent for certain restricted payments, and removing all provisions and definitions relating to spinoff listing; revising the definition of “significant asset sale” to include any asset sale the gross cash proceeds of which are over RMB 3 billion, amending the provisions relating to designation of unrestricted subsidiaries to specifically require satisfaction of fixed charge coverage ratio and shortening the waiting period before a holder of the new notes may institute proceedings with respect to the new notes.

The exchange is expected to occur on March 27 with listing of the new notes on March 30.

As previously reported, the company said it is offering to exchange a minimum of $225 million, or 75%, of the outstanding notes for new notes due 2022 and cash and that if the exchange offer and consent solicitation are not consummated, it may not have the funds to repay the existing notes at maturity.

The new notes will have an initial 10% coupon, which will step up to 14% after six months.

Under the consent solicitation, Yida China is seeking to remove substantially all of the restrictive covenants and certain events of default or other provisions under the existing note indenture.

By validly tendering their notes, holders will be deemed to have given consent in the consent solicitation. Holders may not give consents without tendering existing notes.

If less than 75% of the existing notes is tendered, the exchange offer and consent solicitation will lapse automatically. If 90% or more of the existing notes is tendered, the offer and solicitation will be automatically consummated, so long as some conditions are met. If in between 75% and 90% of the notes is tendered, the company said it will decide whether to proceed with the exchange offer and consent solicitation.

If the offer and solicitation are not consummated, the company said it will consider engaging Admiralty Harbour Capital Ltd. as its financial adviser to contemplate an alternative debt restructuring exercise.

The minimum denomination of new notes is $150,000 and integral multiples of $1,000 in excess thereof. It was lowered from $200,000 and integral multiples of $1,000 in excess thereof originally.

There is a put option under the new notes, under which the company will, at the option of any holder of the new notes, repurchase all of the new notes held by such holder, or any portion of the principal thereof that is equal to the minimum denomination of the new notes or integral multiples of $1,000 in excess thereof on March 8, 2021 at par plus accrued interest, if any, to but not including March 8, 2021.

The company said its existing internal resources may be insufficient to repay the existing notes, its only offshore debt other than certain shareholder loans, and that it is conducting the exchange offer and consent solicitation to “improve its overall cash and financial condition, extend its debt maturity profile, strengthen its balance sheet and improve cash flow management.”

Admiralty Harbour Capital Ltd. (+852 2110 1666 and yida_enquiries@ahfghk.com) is the dealer manager.

Morrow Sodali (+44 20 7355 0628, +852 2158 8405 and Yida@investor.morrowsodali.com) is information, exchange and tabulation agent.

Yida China Holdings is a business park developer and operator.

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