China Forestry Holdings Co. (930) will extend a plan to buy back its U.S. dollar bonds after defaulting on a coupon payment last week.
The Beijing-based logger plans to keep its offer open through 11:59 p.m. New York time on Dec. 24, 2014 to repurchase the outstanding $180 million of 10.25 percent notes due November 2015, it said in a filing to the Hong Kong stock exchange yesterday. That’s the seventh extension since the offer was first made in November.
Bondholders tendered $98.8 million of the senior notes, or 63.7 percent of the securities China Forestry didn’t already own, the filing showed. The Chinese company requires 80 percent acceptance to complete the plan and amend some of the bonds’ terms to make them less restrictive, according to its original Nov. 22 offer document. It said at the time it owned $25 million of the securities as a result of open-market purchases.
China Forestry, which is backed by private equity firm Carlyle Group LP, said June 16 it’s considering “various options” to restructure its debt after defaulting on the 2015 notes. It missed a half-yearly coupon payment that day as it seeks more time to audit its books.
The timber company has accumulated 5.47 billion yuan ($877 million) in losses since Dec. 31, 2010, according to its financial statements. It published interim accounts for the period to June 30, 2013 on Sept. 12 and has delayed issuing full-year earnings three times this year, stock exchange filings show.
Since discovering financial irregularities in early 2011, the company has been able to account for less than 1 percent of sales, it said in April 2012. Crowe Horwath (HK) CPA Ltd. were hired as auditors in January 2012 after KPMG LLP resigned.
Its 2015 bonds were little changed at 32.875 cents on the dollar yesterday, Bloomberg-compiled prices show. The notes have lost 20 percent this year after falling 12.7 percent in 2013.
China Forestry’s shares have been suspended from Hong Kong trading since January 2011.
The company is offering bondholders $425 cash, plus accrued and unpaid interest, for each $1,000 of notes tendered, according to the Nov. 22 filing. An early consent payment of $7.50 for each $1,000 of notes has expired.
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