UPDATE 1: Yida Launches Consent Solicitation to Waive Default, Reduce Coupon, Amend Repayment Schedule Under $224.9M 14% Senior Notes Due March 27, 2022; to Pay 2% Consent Fee

UPDATE 1: 8:48 p.m. ET 2/25/2021: Yida announced to the Hong Kong stock exchange today, Feb. 26, that it is launching a consent solicitation to seek a waiver on a $108.8 million arbitration award and an reduction of the coupon rate of the existing $224.9 million 14% senior notes due March 27, 2022, to 12% from 14% per annum and provide a repayment of portions of the principal amount of the outstanding notes prior to maturity.

Any judgment against the company that exceeds $15 million and is not paid within 90 consecutive days constitutes an event of default. Since the $108.8 million arbitration award against Yida was not paid within 90 days, the company is seeking a waiver of that constituting default.

Revised repayment schedule will be:
 

• $11.25 million (less any principal amount of the Notes redeemed from, and excluding, the date of the supplemental indenture to, and including, March 27) or, if less than $11.25 million principal amount of the Notes remain outstanding, the remaining balance on March 27;
• $22.5 million (less any principal amount of the Notes redeemed from, and excluding, the date of the Supplemental Indenture to, and including, March 27, 2021) or, if less than $11.25 million principal amount of the notes remain outstanding, the remaining balance on March 27;
• $22.5 million (less any principal amount of the notes redeemed from, and excluding, April 16 to, and including, Aug. 27) or, if less than $22.5 million principal amount of the notes remain outstanding, the remaining balance on August 27;
• $45 million (less any principal amount of the Notes redeemed from, and excluding, Aug. 27 to, and including, Dec. 27) or, if less than $45 million principal amount of the notes remain outstanding, the remaining balance on Dec. 27; and
• all remaining balance on March 27, 2022.

Holders will be paid $20 for each $1,000 in principal of the notes for which a consent is validly delivered before the expiration date of March 5, at 5 p.m. Central European Time, according to the announcement.

Admiralty Harbour is the consent solicitation agent, and Morrow Sodali is the information agent.

The company said if the consent solicitation is lapsed, the company might not have sufficient funds to settle the put option exercisable on March 8 under the $224.9 million 14% senior notes due March 27, 2022, according to the consent solicitation statement.

---

Original Story 5:27 a.m. UTC on Feb. 22, 2021

Yida Finalizing Proposal to Resolve March 8 Put Option Under $224.9M 14% Notes Due 2022

Hong Kong-listed, Dalian-based industrial park developer Yida China is finalizing a proposal with its financial advisor to resolve an upcoming put option exercisable on March 8 under the $224.9 million 14% senior notes due March 27, 2022 amid a tight liquidity situation, said three sources familiar with the matter. A holistic plan will be announced in the next few days, one of the sources added.

A repurchase notice was delivered to noteholders earlier this month and they were required to submit their instructions by Feb. 16, according to a copy seen by Reorg.

The property developer reported an unrestricted cash of just RMB 568.4 million ($87.9 million) as of June 30, 2020. Contracted property sales for the year declined over 22% year over year to RMB 5.6 billion while contracted sales in January were also down over 25%, which was attributed to lockdown measures due to a resurgence of Covid-19 cases in its home base Dalian, one of the sources said.

Missing the put option will constitute an event of default while the notes will become immediately due and payable upon acceleration by holders with 25% or more in aggregate principal, according to notes’ offering memorandum.

There will also be a default interest of 16% on any overdue amounts owed under the notes following the date on which such overdue amount triggers an event of default. Changing the time, manner or put price under the March 8 put option requires the consent of 75% of the aggregate principal amount of the outstanding notes, according to the OM.

The outstanding $224.9 million notes, which have a step up interest mechanism starting at 10% for the first six months and then increasing to 14% for the remainder of the tenor, were the result of a distressed exchange just before the maturity of its $300 million 6.95% senior notes due April 19 last year, as reported.

The offer was ultimately accepted by 82.4% of noteholders by value after sweetening the offer by topping up cash consideration and credit enhancement measures.

Yida China’s capital structure is as follows: