China Maple Leaf holders put $20.2 million bonds; payment won’t be made

By Marisa Wong

Los Angeles, June 20 – China Maple Leaf Educational Systems Ltd. announced the expiration of the exercise period for the redemption of its 2.25% convertible bonds due 2026 due to a relevant event.

Following the occurrence of the relevant event on April 17, namely the suspension of trading of the bonds, holders had the right to require the company to redeem all or some of their bonds.

The put option exercise period expired on June 17. As of that date, the paying agent received redemption notices for $20.2 million of the $75 million of outstanding bonds, according to a company announcement on Monday.

The redemption date is July 1. Because that is a non-business day, the payment date will be July 3.

However, as disclosed in an April 14 announcement, due to prevailing controls of the State Administration of Foreign Exchange of China and other related policies, the company is unable to remit funds out of China. The company said that it will not, therefore, be able to make the relevant event put option payment.

The company will also be unable to make the second mandatory redemption on June 27, as disclosed in the April announcement.

The company conveyed that it was committed to ensuring that the bondholders will be repaid in full, over time.

The company said it has entered into discussions with a group of bondholders who collectively hold or are economically entitled to about 80% of the principal amount of the bonds. The goal of the discussions is to reach a consensual restructuring, through amendments and corresponding waivers in relation to the bonds.

The company plans to make further announcements about the restructuring.

China Maple Leaf is a China-based independent international school system.

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