Linklaters acted as the US and Hong Kong SAR legal advisor on the successful consent solicitation in respect of five outstanding US dollar bonds totalling approximately US$1.5bn by China South City Holdings Limited.
The highly bespoke proposal involves a combination of maturity extension, interest rate alignment and reduction and bespoke call features. Shenzhen SEZ Construction and Development Group Co., Ltd. (SZCDG), a major shareholder of China South City, will enter into a keepwell deed for the benefit of the holders. The consent solicitation is made fully inter-conditional to ensure this will lead to a decisive re-profiling of the company’s offshore public debt. The consent solicitation was hugely successful and received overwhelming support, with all five series of bonds receiving the necessary votes in favour.
Linklaters assisted the company in successfully countering an inimical public lobbying campaign during the process with strong, effective and timely legal support. In addition, the firm assisted with the structuring of the transaction and investor communications and led the drafting of all documentation. The firm provided essential support and expertise in high-yield bonds, debt restructuring and crisis management which ensured the success of the transaction.
The successful consent solicitation will benefit both the company and the shareholders. China South City will be able to achieve immediate stability thanks to a swift and decisive transaction, extend its debt maturity profile and improve cash flow management, while the shareholders will benefit from such stability as well as additional support from a major shareholder pursuant to the keepwell arrangement.
The transaction was led by Linklaters’ Asia Managing Partner William Liu, capital markets partner Hyung Ahn, dispute resolution partner Justin Tang, capital markets counsel Christian Felton and senior associates Shan Jiang and Chin Lee.
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