Yihua Enterprise Group
Holders of 25% of Yihua’s $250M 8.5% Senior Notes Due Oct. 23 Send Acceleration Notice
Thu 06/11/2020 07:49 AM
Three holders of Yihua Enterprise Group’s defaulted $250 million 8.5% senior notes due Oct. 23, who collectively hold 25% in principal amount of the notes, sent an acceleration notice to trustee BNY Mellon yesterday (June 10) as they became frustrated by the defaulted Chinese furniture and healthcare company’s unresponsiveness following the offshore bond default on May 25, said three noteholder sources familiar with the matter.
Meanwhile, some disgruntled retail investors are losing patience and plan to petition China’s National People’s Congress (NPC) in a bid to put pressure on Yihua chairman and NPC member Liu Shaoxi, two of the noteholders said.
Some noteholders, which Reorg spoke with, are convinced that Yihua Enterprise is intentionally evading its debt and that company assets have been dissipated, adding that Liu’s family has substantial personal investments, including stakes in several listed companies, and Liu could have bailed Yihua out.
As reported, Yihua defaulted on its $250 million 8.5% senior notes due Oct. 23 after it failed to cure the missed $10.6 million coupon payment under the notes before a 30-day grace period ended on May 25.
During the grace period, the company had previously requested that bondholders extend it for three more months, touting that the company would be able to collect outstanding proceeds from the sale of property projects to a strategic investor, state-owned Poly Development, as previously reported.
Yihua Enterprise and Poly Real Estate formed a strategic partnership in real estate and healthcare in August 2019. According to a framework agreement disclosed at the time, Yihua will provide 20 land plots located in Guangdong, Sichuan, Hubei and Shandong provinces for Poly to develop, as reported.
Below is the capital structure of Yihua Enterprise Group:
Meanwhile, some disgruntled retail investors are losing patience and plan to petition China’s National People’s Congress (NPC) in a bid to put pressure on Yihua chairman and NPC member Liu Shaoxi, two of the noteholders said.
Some noteholders, which Reorg spoke with, are convinced that Yihua Enterprise is intentionally evading its debt and that company assets have been dissipated, adding that Liu’s family has substantial personal investments, including stakes in several listed companies, and Liu could have bailed Yihua out.
As reported, Yihua defaulted on its $250 million 8.5% senior notes due Oct. 23 after it failed to cure the missed $10.6 million coupon payment under the notes before a 30-day grace period ended on May 25.
During the grace period, the company had previously requested that bondholders extend it for three more months, touting that the company would be able to collect outstanding proceeds from the sale of property projects to a strategic investor, state-owned Poly Development, as previously reported.
Yihua Enterprise and Poly Real Estate formed a strategic partnership in real estate and healthcare in August 2019. According to a framework agreement disclosed at the time, Yihua will provide 20 land plots located in Guangdong, Sichuan, Hubei and Shandong provinces for Poly to develop, as reported.
Below is the capital structure of Yihua Enterprise Group:
(Click HERE to enlarge)
This article is an example of the content you may receive if you subscribe to a product of Reorg Research, Inc. or one of its affiliates (collectively, “Reorg”). The information contained herein should not be construed as legal, investment, accounting or other professional services advice on any subject. Reorg, its affiliates, officers, directors, partners and employees expressly disclaim all liability in respect to actions taken or not taken based on any or all the contents of this publication. Copyright © 2024 Reorg Research, Inc. All rights reserved.