On 3 August 2022, Shimao Services Holdings Limited (873.HK
) successfully completed the Consent Solicitation in relation to its HK$3.11 billion 2.25% convertible bonds due 2022.
On 23 June 2022, trading in the shares of the Company on the Hong Kong Stock Exchange was resumed after suspension for 35 days. As a result of the suspension of trading exceeding 30 consecutive trading days, a Relevant Event had occurred and consequently, the redemption obligations under the bonds were triggered. Coupled with several external factors, the triggering of the immediate redemption obligations was unexpected and it was very difficult for the Company to repay the bonds on the Redemption Date (12 August 2022). In light of the situation, the Company and Admiralty Harbour launched the Consent Solicitation to seek waivers of the redemption obligation and to amend the terms of the bonds by adding an anytime call option.
After launching the consent, with the assistance of Admiralty Harbour, the Company collected feedback from the major holders and made progress in mobilizing certain funds, and later announced a supplemental undertaking to redeem 45% of the bonds on the effective date of the consent by using the anytime call introduced through the amendment. The revised consent was highly supported by the holders. The requisite consent at the bondholder meeting held on 1 August 2022 had been successfully acquired.
On 3 August 2022, the Company delivered the redemption notice to redeem 45% of the bonds. The Company will repay the remaining principal of the bonds on the original maturity date.
This is one of the very few successful liability management transactions in the region involving public equity-linked bonds and is also the first successful offshore liability management transaction completed by a Chinese property management company. The transaction showcased Admiralty Harbour’s in-depth knowledge of compound financial instruments and the capability of negotiating with international investors to achieve the best outcome for the Company.