Sidley represented prominent Chinese real estate developer Ganglong China Property Group Limited (the Company) in connection with its consent solicitation of the US$145 million 13.5% senior notes due 2023, to add a redemption option to allow the Company to redeem all of such notes with newly-issued notes. Requisite consents have been received.
After the supplemental indenture to add the redemption option became operative, the Company issued the 9.5% senior notes due 2024 in the aggregate principal amount of US$164.4 million, equal to (i) the then outstanding principal amount of the 13.5% senior notes due 2023 plus (ii) the amount of accrued and unpaid interest to (but excluding) the redemption date, and fully redeemed the 13.5% senior notes due 2023 before the maturity accordingly.
The introduction of the redemption option is a unique feature, helping the issuer overcome several common deal hurdles. By adding a redemption feature, the consent successfully helped the Company redeem existing notes in whole and pay the redemption price by issuing new notes.
This landmark deal avoided the holdout issue in a typical exchange offer and effectively extended debt maturity without any extension of the maturity date of the existing notes which would not be possible without NDRC quota. We expect a number of similarly situated companies in the markets may consider following the same approach later on.
Ganglong China Property Group Limited is an established property developer in the Yangtze River Delta Region focusing on the development and sales of properties predominantly for residential use mixed with accompanying ancillary facilities, such as retail units, car parks and ancillary areas.
The complex liability management was led by partner Renee Xiong. Other team members included counsel Dominic Sze, senior managing associate Scarlet Feng, associate Peter Liu and senior legal assistant Kristine Zhang.