Hidili Industry Sued in Hong Kong Over Bond Conversion
Hidili Industry International Development Ltd. (1393), a Chinese mining company and producer of coking coal, said a lawsuit was filed against it in Hong Kong seeking to void a conversion of bonds into new stock.
The two plaintiffs said notices to convert 104.6 million yuan ($16.8 million) of bonds into shares were mistakenly issued, rather than notices to redeem the bonds, according to Hidili’s filing yesterday to Hong Kong’s stock exchange. The suit alleges the company “knew or ought to have known” that the plaintiffs intended to file for redemption and therefore the conversion notices are void, according to the filing.
Hidili said it will seek to verify that it has been served with the writ, filed in Hong Kong’s High Court on Jan. 28, and will seek legal advice and make further statements as necessary. The convertible bonds are yuan-denominated, U.S. dollar-settled 1.5 percent notes issued in 2010 and maturing in 2015.
Hidili, based in Panzhihua, Sichuan, China, gained 4 percent to close at HK$2.31 yesterday in Hong Kong, before the announcement. The shares have fallen 21 percent in the past year.
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