Mon 10/05/2020 06:36 AM
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Holders of Dr. Peng Telecom & Media Group’s restructured $500 million 7.55% senior notes due Dec. 1, 2021 have yet to receive payments for a $80.2 million mandatory redemption that was scheduled for Oct. 1 according to three sources.

The payment delay is likely due to the National Day holiday in China which spans from Oct. 1 to Oct. 7 as the company had previously assured investors that it would make the payment on time according to debt restructuring terms, two of the sources said. Continue reading for the Asia Core Credit team's update on the Dr. Peng debt refinancing, and request a trial to access our coverage of thousands of other debt refinancing situations.

The originally due June 1 notes were restructured through a consent solicitation and consist of three mandatory principal redemptions that amount to 20% on June 1, 19% on Oct. 1 and 16% on March 1, 2021, as reported.

The first $84.5 billion redemption was made on time and was funded by the RMB 2.3 billion ($338.7 million) sale of its internet data center assets to Pins International Financial Holding, which is a subsidiary of Vienna Insurance Group AG, and domestic private equity firm Jinquan Yuanhe Investment, the sources said.

Meanwhile, Dr. Peng has on Sept. 18 completed the disposal of its U.S. investment, Texas-based broadband company Entouch Systems to RCN, Grande and Wave, a network of cable providers backed by TPG Capital, according to a press release.

As reported, the disposal was expected to be completed around the end of the third quarter and early fourth quarter once approved by U.S. regulators and would bring in less than $100 million.

According to Dr Peng’s consent solicitation memorandum for the restructured notes, the mandatory redemption on Oct. 1 is secured by Dr. Peng’s interests as the sole limited partner in Eximious Capital LP, a Cayman Islands incorporated limited partnership that wholly owned Entouch Systems, as well as a Hong Kong bank account into which Dr. Peng expected to receive the sale proceeds.

Dr. Peng did not respond to a request for comment.

Dr. Peng Telecom’s $500 million 7.55% senior notes due Dec. 1, 2021 were indicated at 71 today according to a buysider.

Dr. Peng’s capital structure is below:

(Click HERE to enlarge)

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