Zhenro Properties has requisite consents from two solicitations

Chicago, March 14 – China’s Zhenro Properties Group Ltd. says that it received the requisite consents for two consent solicitations started on Feb. 21, according to a press release.

The company has received the requisite consents for five senior notes that were part of an exchange offer and consent solicitation and the eight notes that were part of a concurrent consent solicitation.

Supplemental indentures for each of the notes have been executed on March 14.

The supplemental indentures will become operative when the exchange and consent considerations are paid.

The applicable exchange and consent considerations are expected to be paid on March 29.

The company had modified the offer to pay $2.50 per $1,000 note in the consent solicitation for the eight series of notes if noteholders consented by the final deadline.

Zhenro started the liability management transactions to deal with its inability to possibly address upcoming debt maturities in March 2022.

Consent solicitations

For the five exchange and consent senior notes, the company was soliciting consents to eliminate substantially all of the restrictive covenants and to modify certain of the events of default, the definition of change of control and other provisions in the existing notes indentures and to waive any potential breaches.

For the concurrent stand-alone consent solicitation, the company was seeking to waive any potential breaches and to amend the definition of change of control and the events of default provision in the consent notes indentures to carve out any default or event of default as a result of a default or event of default occurring under the existing notes, the perpetual securities, the October 2020 deed and the existing bank loans.

Exchange results

As of 11 a.m. ET on March 11, noteholders tendered for exchange the following amounts of notes:

• $43 million, or 86%, of the $50 million outstanding 5.95% senior notes due March 2022 issued by ZhenAn Glory Investment Ltd. (ISIN: XS2308085112) with a minimum acceptance amount of $42.5 million;

• $192,429,000, or 88.1%, of the $218.39 million outstanding 5.98% senior notes due April 2022 (ISIN: XS2329241447) with a minimum acceptance amount of $185,631,500;

• RMB 1,569,980,000, or 98.1%, of the RMB 1.6 billion outstanding 7 1/8% senior notes due June 2022 (ISIN: XS2358480155) with a minimum acceptance amount of RMB 1.36 billion;

• $268,323,000, or 91.6%, of the $293 million outstanding 8.7% senior notes due August 2022 (ISIN: XS2050860308) with a minimum acceptance amount of $249.05 million; and

• $211,861,000, or 89.7%, of the $236.3 million outstanding 6½% senior notes due September 2022 (ISIN: XS2383329237) with a minimum acceptance amount of $200,855,000.

For all of the dollar notes, Zhenro was offering an equal amount of new dollar-denominated senior notes due March 6, 2023 with an 8% coupon. Exchanging noteholders would also receive $10 in cash per $1,000 note if they exchange their notes by the early consent deadline, or $5 in cash if they exchange after the early deadline. Interest will also be paid in cash.

Similarly, for the renminbi-denominated notes, holders were being offered a like amount of 8% senior notes due March 6, 2023 plus RMB 100 cash (per RMB 10,000 note) for holders who submitted their notes by the early deadline or RMB 50 after the early deadline, and accrued interest also in cash.

For clarity, all of the notes listed above were issued by Zhenro except for the first series.

The outstanding amount does not include $1.81 million held by two of the company’s directors and $20.5 million held by the company.

Tendering noteholders were deemed to have given consent in the consent solicitation.

Consent solicitation

There was a concurrent consent solicitation for eight series of senior notes.

The company was soliciting consents for the following notes:

• $200 million outstanding 8.35% senior notes due 2024 (ISIN: XS2152219973);

• $300 million outstanding 9.15% senior notes due 2023 (ISIN: XS2076026983);

• $200 million outstanding 8.3% senior notes due 2023 (ISIN: XS2185842924);

• $290 million outstanding 7 7/8% senior notes due 2024 (ISIN: XS2099413093);

• $340 million outstanding 7.1% senior notes due 2024 (ISIN: XS2346158822);

• $349 million outstanding 7.35% senior notes due 2025 (ISIN: XS2226898216);

• $393 million outstanding 6.63% senior notes due 2026 (ISIN: XS2279711779); and

• $291 million outstanding 6.7% senior notes due 2026 (ISIN: XS2293750670).

For the consent solicitations to be successful, a majority of noteholders from each series had to consent.

The company said that as of 11 a.m. ET on March 4, the requisite consents had been received for the concurrent consent solicitation.

Details

The exchange offer and early consent solicitation deadline have been extended to 11 a.m. ET on March 18.

This is the second extension for the early consent deadline for this offer.

As a note, Zhenro started a consent solicitation for a series of perpetual securities on Feb. 18.

Admiralty Harbour Capital Ltd. is the solicitation agent and the dealer manager for the exchange offer (zhenro@ahfghk.com).

D.F. King & Co., Inc. is the information, exchange and tabulation agent (+44 20 7920 9700, +852 3953 7208, zhenro@dfking.com, consent website: https://sites.dfkingltd.com/Zhenro2nd; exchange and consent website: https://sites.dfkingltd.com/Zhenro3rd).

Zhenro is a Shanghai-based real estate developer.

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