China Forestry accepts $120 million tendered 7¾% notes for purchase

By Marisa Wong

Madison, Wis., Aug. 12 - China Forestry Holdings Co. Ltd. announced that holders tendered $293.73 million principal amount, or 97.91%, of its $300 million of outstanding 7¾% senior notes due 2015 as of 11:59 p.m. ET on Aug. 10, the expiration date of the previously announced tender offer for the notes. China Forestry began a cash offer on July 14 for up to $120 million of the 7¾% notes.

The company said it will accept for purchase $120 million of the tendered notes on a pro rata basis. The company will pay about 40.9% of the principal amount of the tendered notes at $1,000 per note, along with accrued interest.

The company also solicited consents from holders to amend the indenture governing the notes to waive any failure by the company or its subsidiary guarantors to comply with the indenture, defaults and events of defaults and to release the company, its subsidiaries and current officers and directors from certain liabilities.

Holders who tendered their notes were required to deliver consents, but holders were permitted to deliver consents without tendering their securities. As of the expiration of the tender offer, holders of $296.68 million principal amount, or 98.89%, of the total amount of notes outstanding had delivered their consents.

Because the required consents were received as of July 27, the early consent deadline, a supplemental indenture was executed on Aug. 1.

As previously reported, the amendments included:

• Increasing the interest rate to 10¼% annually;

• Augmenting the amount of debt the company may incur without satisfying the fixed-charge coverage ratio to $210 million from $10 million;

• Allowing the debt to also be guaranteed by a restricted subsidiary and by the assets of the company and its subsidiaries; and

• Permitting China Forestry to use proceeds from the original offering of the notes to repurchase notes and fund working capital and general corporate purposes.

Holders who tendered by July 27 will receive a consent fee of $5.00 per $1,000 principal amount of notes. Those who tendered after that time are entitled to the $2.50 late consent payment.

China Forestry will pay a total of $123.75 million, including accrued interest, to holders on the payment date, which is scheduled to occur on Aug. 15. Following the purchase of the tendered notes, $180 million of the notes will remain outstanding bearing interest at 10¼%.

Questions may be directed to information and tender agent Bondholder Communications Group, LLC (212 809-2663 or 44 20 7382-4580).

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