Shanghai Industrial Urban Development Group Ltd. is seeking the consent of investors to amend the terms of a bond due in 2014 so that it can take on more debt as part of the acquisition of a company from its parent.
The property developer will pay holders of the 9.75 percent bond $7.50 for every $1,000 of principal, if the investors consent to the changes, according to a statement from the company to the Hong Kong stock exchange today. BOCI Asia Ltd. is managing the solicitation, which closes on Nov. 16 at 5 p.m. New-York time, the company said.
Shanghai Industrial Urban agreed to acquire a property development unit of its parent in April and all of the unit’s debt in exchange for shares of the Hong Kong-listed company. Approval of the amendments to the terms of the bonds would also give Shanghai Industrial Urban the “flexibility” to take advantage of other opportunities that may arise, according to the statement.
The Hong Kong-listed developer sold the $400 million bond in July 2007 when it was trading as Neo-China Land Group Holding Ltd. It changed its name in October 2010.
Shanghai Industrial Urban’s shares have fallen more than 49 percent this year, compared with a 16 percent drop for Hong Kong’s benchmark Hang Seng Index.