China Fortune Land: English scheme convening hearing set for Dec. 7

By Marisa Wong

Los Angeles, Nov. 17 – China Fortune Land Development Co., Ltd. issued an update on Thursday relating to its proposed restructuring.

CFLD (Cayman) Investment Ltd. announced that the convening hearing with respect to the English scheme, at which an order will be sought to convene the scheme meeting for the purpose of considering and approving the English scheme, is scheduled to be heard before the English Court on Dec. 7.

In the event that the English Court makes an order permitting the convening of the scheme meeting, the details of the scheme meeting will be set out in a notice to be provided to scheme creditors, together with the scheme documents and related documents, after the convening hearing.

Documents related to the English scheme can be found on the scheme website: https://sites.dfkingltd.com/cfld.

China Fortune Land is urging holders of existing bonds who have not acceded to the restructuring support agreement to accede to the RSA to be entitled to the cash prepayment fee before 4 a.m. ET on Nov. 24.

The cash prepayment fee deadline had been extended from 5 a.m. ET on Nov. 10 and, before that, from 5 a.m. ET on Oct. 13, as reported.

D.F. King Ltd. (+44 20 8089 3951, +852 5803 0899; https://sites.dfkingltd.com/cfld; cfld@dfkingltd.com) is the information agent.

Admiralty Harbour Capital Ltd. (cfld@ahfghk.com) is restructuring financial adviser to the issuer.

Sidley Austin will act as restructuring legal adviser.

Previous update

On Nov. 8 the company said that holders of more than 50% of the total outstanding principal amount of its existing bonds had acceded to the RSA.

Among those acceding holders, holders of an aggregate principal amount of more than $1 billion of the existing bonds have selected new bond 2 as part of their restructuring consideration on an indicative basis, the company reported.

The company said it decided to ensure fair treatment of all holders of the existing bonds and pursue a holistic restructuring of the bonds by implementing the proposed restructuring via an English scheme. Once sanctioned by the English Court and effective, the scheme would bind all holders of the existing bonds.

Prior details

Over the past few months, the company and its advisers have engaged in in-depth discussions of the terms of the restructuring of its existing bonds with holders of those bonds.

As of Sept. 16, China Fortune’s existing bonds include the following:

• $530 million 8 5/8% guaranteed bonds due February 2021 (ISIN: XS1953977326);

• $200 million 9% guaranteed bonds due June 2021 (ISIN: XS1835626810);

• $940 million 9% guaranteed bonds due July 2021 (ISIN: XS1860402954);

• $60 million 9% guaranteed bonds due December 2021 (ISIN: XS1924881334);

• $340 million 10 7/8% guaranteed bonds due December 2021 (ISIN: XS2275514458);

• $350 million 7 1/8% guaranteed bonds due April 2022 (ISIN: XS1972090119);

• $300 million 6.92% guaranteed bonds due June 2022 (ISIN: XS2189577906);

• $330 million 8.75% guaranteed bonds due September 2022 (ISIN: XS2232030788);

• $500 million 6.9% guaranteed bonds due January 2023 (ISIN: XS2100597256);

• $650 million 8.6% guaranteed bonds due April 2024 (ISIN: XS1972092248); and

• $760 million 8.05% senior notes due January 2025 (ISIN: XS2100597330).

The proposed restructuring, when completed, will provide the group with a stable capital structure offshore, enabling the group to better manage its operations and deliver long-term value for all of its stakeholders, the company previously said.

The company noted before that it has no alternative restructuring plan for the existing bonds if the proposed restructuring is not consummated.

The proposed restructuring is expected to be implemented through either a scheme of arrangement or an exchange offer and/or consent solicitation.

The company is encouraging holders to accede to the RSA prior to the cash prepayment fee deadline to be eligible to receive a 1% cash prepayment fee and be eligible for redemption upon specific asset sales after successful implementation of the proposed restructuring.

A copy of the RSA is available for download at https://sites.dfkingltd.com/cfld.

Background

As of June 30, China Fortune’s total debt amounted to RMB 187.6 billion, including bank borrowings of RMB 45.2 billion, bonds and debt financing instruments of RMB 77.4 billion and trust, asset management and other financings of RMB 65 billion.

To improve its financial stability and sustainability, the group launched a debt restructuring plan on Sept. 30, 2021 under the guidance of a special committee composed of state and local government agencies, among others.

As of Sept. 16, holders of about RMB 120.3 billion of the group’s onshore debts had signed the onshore restructuring agreement, waiving accrued interests and associated penalty interests thereon by roughly RMB 10.8 billion.

The group is launching the current proposed restructuring for the holders of the existing offshore bonds, guided by the principle of treating pari passu debts equally.

The company said previously that although it still faces various challenges from the macroeconomy, the industry, the credit environment, the Covid-19 pandemic and the tightened liquidity, it has maintained ongoing operations and been actively seeking to resume work and production and to put its business back on track as soon as possible.

At the same time, the group is keen to push forward asset disposals and onshore property trust establishment according to the terms of the proposed restructuring.

China Fortune is a real estate developer based in Beijing.

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