Yuzhou minority noteholders threaten legal action unless notes called

By Marisa Wong

Los Angeles, March 1 – Yuzhou Group Holdings Co. Ltd. announced that some parties who claim to hold minority interests in its 6% senior notes due 2022 (ISIN: XS1555300497) and 8 5/8% notes due 2022 (ISIN: XS1938265474) have contacted the company and informed it of their intention to initiate legal action against the company if it does not redeem those existing notes that they claim to hold on their terms.

This includes the company receiving a statutory demand from an individual with an alleged holding of about $1 million of the notes.

Yuzhou said its board of directors “would like to make it clear to all creditors that the company intends to treat all creditors fairly and is reviewing possible options in order to implement a holistic solution to the current situation that the company and the real estate sector in general find themselves in with a view to securing the long term future of the company for the benefit of all stakeholders.”

The company is urging all creditors “to refrain from taking any radical legal action which may not be conducive to the implementation of such holistic solution and may destabilise the company’s operations.”

The company aims to continue talks with all creditors and is encouraging all creditors to assist it in proactively advancing discussions.

Creditors may reach out to the company at ir@yuzhou-group.com.

As previously announced, Yuzhou completed an exchange offer with overwhelming support of holders of the two series of 2022 notes. The company extended the maturity of more than 95% of the total principal amount of the notes.

The company said it still remains under significant pressure and that recent macroeconomic conditions affecting the Chinese real estate sector persist, as does the continuing regional outbreaks of Covid-19.

However, the company reiterated that it nevertheless intends to proactively manage its exposure under all of its debt.

Based in Shanghai, Yuzhou develops residential properties in southern China.

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