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CIFI Mulls Dishing 6 Debt Haircut Options to Offshore Creditors, Hoping to Reduce Debt by Up To US$4B
CIFI HOLD GP (00884.HK) announced that it has reached an agreement in principle with the ad hoc group of bondholders (AHG) on the key terms of a holistic proposal. Based on the inf...
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CIFI Mulls Dishing 6 Debt Haircut Options to Offshore Creditors, Hoping to Reduce Debt by Up To US$4B
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CIFI HOLD GP (00884.HK)  -0.015 (-3.797%)    Short selling $499.10K; Ratio 0.481%   announced that it has reached an agreement in principle with the ad hoc group of bondholders (AHG) on the key terms of a holistic proposal. Based on the information currently available to the Company, the holders forming the AHG collectively hold or control approx. 43% in aggregate of the principal amount of the Company’s senior notes, perpetual securities and convertible bonds. There are no current legal proceedings against the Company commenced by any creditors.

The Company seeks to address its aggregate offshore indebtedness under the in-scope debt by deleveraging the Company’s consolidated balance sheet (targeted debt reduction of approximately US$3.3 billion to US$4 billion) and designing a sustainable amortisation schedule in order to provide a healthy capital structure for the Company. Therefore, the economic options incorporate elements of haircut and equitisation. Under the proposal, creditors who elect, or are re-allocated to, the option with equitisation element will receive the Company’s shares, an instrument with a 4-year final maturity and elements of mandatory conversion on each anniversary after the transaction's effective date, and a debt instrument with a 4.5-year final maturity, some upfront cash, and a short-term non-interest-bearing instrument.

CIFI provides 6 economic options to its creditors. The haircut of the "Cash" option will be a minimum of 85%, the haircut of the "New Notes and New Loans" option will be 68-80%. and the haircut of the "New Notes and New Loans" option will be 50%. The "Cash, New Notes and equitisation" option will include 60% equitisation and about 8% haircut, while the "New Notes" option and "New Loans" option, prepared for creditors who do not accept haircut, will have no haircut.

The amortisation schedules of most of the options will be spread over a number of years, with maturities ranging from 2 to 6 years from the transaction's effective date, with the maturities of certain options extending to 7 to 9 years from that date if certain benchmarks of contracted sales attributable to owners of the Company are not met over a specified time period or creditors’ approval is obtained. Options with equitisation and/or haircut elements have a shorter weighted average maturity than the other options.

The coupon rate of the New Debt Instruments (other than those with zero interest) will be set at 2.75%. Certain options without haircuts may have coupon rates increase to 3% if the maturities under those options are extended, and 1 option without haircut may have its coupon rate further increased by 1% for one or two years if certain benchmarks of annual contracted sales attributable to the equity owners of the Company following the transaction's effective date are met. Most of the options will include pay-in-kind mechanism or interest deferral mechanism where the deferred interest (without any compounding) will be paid in a lump sum together with or after the repayment of the last amortisation instalment.

As of the date of this announcement, the Company is still in negotiations with the Co-ordination Committee and the AHG on definitive terms of the Proposal and parties have not entered into any legally binding agreement in respect of the same.


(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-05-14 16:25.)

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