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Powerlong Real Estate Holdings Limited - Exchange Offer & Consent Solicitation (s) - Update

UPDATE TO THE EXCHANGE OFFER, THE CONSENT SOLICITATION AND THE CONCURRENT CONSENT SOLICITATION

03 JULY 2023


Full announcement, including disclaimers and offer restrictions, is available at SGX (Source: Powerlong Real Estate Holdings Limited)


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"The Company would like to express their sincere gratitude to holders who have so far participated in the Exchange Offer, the Consent Solicitation and the Concurrent Consent Solicitation. The Company is pleased to announce that as of the time of this announcement, a large amount of tender of the Exchange Notes from the Eligible Holders and consenting votes of the Consent Notes and Concurrent Consent Notes from the Holders of each series of the notes under the Consent Solicitation and Concurrent Consent Solicitation have been received.


The Company urges Eligible Holders of the Exchange Notes who have not yet tendered their Exchange Notes and the Holders of the Consent Notes and the Concurrent Consent Notes who have not yet provided their Consent or Concurrent Consent to do so as soon as possible before the expiration deadline of the Exchange Offer, the Consent Solicitation and the Concurrent Consent Solicitation, which is 4:00 p.m., London time (11:00 p.m., Hong Kong time), on July 4, 2023. If the Exchange Offer, the Consent Solicitation and the Concurrent Consent Solicitation are successfully consummated, the Company would be able to focus its resources back into improving its operations to regain market position in order to generate value for its stakeholders."


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Launch of Offer to Exchange, Consent Solicitation & Concurrent Consent Solicitation

21 JUNE 2023


Full announcement, including disclaimers and offer restrictions, is available at SGX



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"On June 21, 2023, the Company is conducting the Exchange Offer with respect to the Exchange Notes held by non-U.S. persons outside the United States. The Exchange Offer is being made upon the terms and subject to the conditions set forth in the Exchange Offer Memorandum. The principal purpose of the Exchange Offer is to extend the Company’s debt maturity profile and improve its cash flow management.


The Company is also soliciting consents from the holders of the Consent Notes to certain proposed amendment to the Consent Notes Indentures pursuant to the Consent Solicitation as described in the Consent Solicitation Statement. The principal purpose of the Consent Solicitation and the Proposed Amendment is to amend the events of default provision in the Indentures to carve out any default or event of default in respect of each series of the Consent Notes which may be caused by certain default or event of default, judgment for money or order for relief, involuntary insolvency proceedings or appointment of receiver, with respect to or arising as a result of the July 2019 Notes and certain private senior notes, as set forth in the Consent Solicitation Statement.


The Company is also soliciting consents from the holders of the Concurrent Consent Notes to certain proposed waiver and amendment to the Concurrent Consent Notes Indentures pursuant to the Concurrent Consent Solicitation as described in the Concurrent Consent Solicitation Statement. The principal purpose of the Concurrent Consent Solicitation and the Proposed Waiver and Amendment is, in accordance with the terms and subject to the conditions set forth in the Concurrent Consent Solicitation Statement, (a) to extend the Final Maturity Date under each Concurrent Consent Notes Indenture, (b) to add provisions for deferred upfront payment and mandatory redemption in the Concurrent Consent Notes Indentures and (c) to amend the definition of Excluded Notes in the Concurrent Consent

Notes Indentures to carve out any default or event of default in respect of each Series of Concurrent Consent Notes as a result of (i) a default or event of default occurring under the July 2019 Notes and certain private notes, or any default resulting therefrom, (ii) any final judgement for the payment of money or order for relief rendered against us in relation

to the July 2019 Notes and certain private notes (or other indebtedness the default or event of default of which was caused by a default or event of default in relation to the July 2019 Notes and certain private notes), (iii) involuntary insolvency proceedings commenced against us with respect to or based on the July 2019 Notes and certain private notes, or (iv) any consent from us to appoint a receiver for all or substantially all of our properties or undertake similar actions to defend against any remedy holders of the July 2019 Notes and certain private notes may exercise. The Company also proposes to amend other related changes and make certain other updates as set forth in the forms of the supplemental indentures attached in the annexes of the Concurrent Consent Solicitation Statement."


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"BACKGROUND AND PURPOSE


During the second half of 2021, Chinese property developers and the capital markets that have funded growth and development of the sector have experienced an inflection point. Reduced bank lending for real estate development has adversely affected access by property developers to onshore capital. Buyers’ concerns about the ability of property developers to deliver projects has adversely affected property sales. In addition, the use of pre-sale proceeds is also restricted under the applicable PRC policies. Driven by these negative onshore events and austerity policies, offshore capital markets have reacted negatively, which limited our funding sources to address upcoming maturities.


The property sector in China has continued to experience volatility in 2022. Further tightened bank lending, coupled with certain negative credit events, has intensified market concerns over the operations of Chinese property developers. As a result, pre-sale of Chinese property developers has generally decreased. In light of the foregoing, our revenue and gross profit in 2022 have decreased as compared to the corresponding period in 2021. Our cash and bank balances as of December 31, 2022 also decreased as compared to December 31, 2021.


Although a series of supportive policies have been put forward by regulators during the second half of 2022, recovery of developers already in financial distress has been slow and limited so far. As the market demand remains weak, the exact timing of recovery is still uncertain.


Against the backdrop of the adverse market conditions, we anticipate that the market condition in the real estate sector will remain under pressure in 2023.


We are committed to mitigating the effects of the recent adverse market conditions and are striving to meet our financial commitments by prudently utilizing our existing financial resources. As part of these efforts, we have conducted certain liability management exercises with respect to our senior notes in July 2022 and we are conducting the Exchange Offer, the Consent Solicitation and the Concurrent Consent Solicitation. We believe the Exchange Offer, the Consent Solicitation and the Concurrent Consent Solicitation will extend our debt maturity profile and improve our cash flow management, which would be in the interest of all our stakeholders, including the holders of the Exchange Notes, the Consent Notes and the Concurrent Consent Notes."


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