Mega Wisdom seeks to amend Fortune Joy, Sino-Ocean-guaranteed notes

By Marisa Wong

Los Angeles, May 26 – Mega Wisdom Global Ltd. is inviting holders of its $497 million outstanding 6¼% secured notes due 2023 (ISIN: XS2342977324) guaranteed by Fortune Joy Ventures Ltd. and Sino-Ocean Capital Holding Ltd. to consent to some amendments and waivers relating to the notes, according to a notice.

Since early 2022, Fortune Joy and its subsidiaries have been experiencing liquidity pressure due to adverse market conditions, which results in reduced operating cash inflow and limited access to external capital to refinance its existing debt. The group said it has been in active discussions with its creditors to address these challenges and has been striving to mitigate the impact from those adverse market conditions. However, despite these efforts to enhance its liquidity position, there are uncertainties over debt refinancing and challenging operating and funding conditions, and consequently the group’s liquidity pressure persists.

Mega Wisdom is therefore soliciting consents from noteholders to the proposed amendments and waivers under an extraordinary resolution, which, if implemented, will allow the group to improve its financial profile and liquidity position.

Proposals

Some highlights of the proposed amendments and waivers include the following:

• Extending the maturity date of the notes to June 22, 2029 from June 22, 2023;

• Paying the accrued interest for the period from and including Dec. 22, 2022 to but excluding June 22, 2023 in cash on June 22, 2025;

• Changing interest payment frequency from semiannual to annual and the rate of interest from 6¼% to 5% for the interest periods from and including June 22, 2023;

• Including an option for the issuer to elect to pay PIK interest at 6% per annum in lieu of paying cash interest for the interest periods from and including June 22, 2023 to but excluding June 22, 2028;

• Including provisions that not less than 5% and 15%, respectively, of the aggregate principal amount of notes outstanding on the amendment effective date will have been redeemed or purchased and canceled by June 22, 2027 and June 22, 2028, respectively; and

• Adding a buyback and an optional call in whole or in part at par with 15 to 30 days’ notice.

The proposals also include, among other things, amendments to definitions of extraordinary resolution and some events of default.

In addition, the issuer is seeking consents to lower the threshold for definitions of written resolution and electronic consent to 75% from 90%.

Details

No consent fee is being offered.

The consent solicitation will expire at 11 a.m. ET on June 14.

Holders will vote on the extraordinary resolution at a meeting scheduled for 5 a.m. ET on June 21 in Hong Kong.

The quorum required at the meeting is two or more persons holding or representing no less than three-quarters of the aggregate principal amount of notes outstanding. If the meeting is adjourned, the quorum will drop down to two or more persons representing not less than one-quarter of the aggregate principal amount outstanding.

To pass, the extraordinary resolution requires approval by two or more persons representing at least three-quarters of the principal amount outstanding or, if the meeting is adjourned, one-quarter of the principal amount outstanding.

If approved, the amendment is expected to take effect on June 21.

Haitong International Securities Co. Ltd. (+852 2840 1680; project.starfish.iv.2023@htisec.com) is the solicitation agent.

Morrow Sodali Ltd. (+44 20 4513 6933, +852 2319 4130; sinooceancapital@investor.morrowsodali.com; https://projects.morrowsodali.com/sinooceancapital) is the information and tabulation agent.

Sino-Ocean is a property developer based in Beijing.

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