Dalian Wanda wins consent from bondholders to restructure US$600 million bond, weaken debt covenants
- Bondholders have given their consent and votes amounting to 99.3 per cent of the 2024 note’s face value
- Proposal to extend bond maturity by 11 months, weaken debt covenants to be voted at a meeting in Hong Kong on December 13
The group received consent from investors holding 99.3 per cent of the face amount of the bond when the early-consent deadline expired at 4pm London time on November 29, according to a Hong Kong exchange filing. That also surpassed the 66 per cent quorum for the meeting to consider the maturity extension proposal, it added.
The group is “very pleased and encouraged by the enthusiastic support from bondholders” who have voted in favour of the proposal,” the filing on Thursday said. “This is testimony to the confidence of the bondholders in the issuer.”
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Dalian Wanda offered bondholders 1 cent on the dollar in early-consent fees. It is also giving 2.5 cents for their vote in favour of the proposal by the second deadline at 4pm on December 8. That proposal will be put to vote at 10.30am local time on December 13 in the office of law firm Linklaters in Hong Kong.
China’s real estate industry, including the commercial property management sector and the related sectors, has been affected by economic slowdown, fluctuations in the financial markets and other adverse market conditions, hurting the group’s business and cash flows, Dalian Wanda said.
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Under its bond restructuring plan, Dalian Wanda has agreed to repay 10 per cent of the US$600 million bond on January 5, 20 per cent on May 29, 30 per cent on September 29 and the rest upon maturity, according to its solicitation document. The landlord also sought to loosen the bond covenants, including removing some default-event clauses and put option features.
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The bond is Dalian Wanda group’s closest maturing offshore dollar note. The company has two other notes due in 2025 and 2026 totalling US$800 million, according to Bloomberg data.
The conglomerate, controlled by billionaire Wang Jianlin, has been struggling with a liquidity crunch over the past two years. In July, it warned of a funding shortfall just days before redeeming a US$400 million bond.
Fitch Ratings last week downgraded Wanda Commercial’s debt rating deeper into junk territory, while Moody’s also lowered its rating into that zone following the consent solicitation process.
