Proposed Offshore Debt Restructuring and Continued Suspension of Trading
This announcement is made by China Singyes Solar Technologies Holdings Limited (or the “Company” and together with its subsidiaries, the “Group”) pursuant to Rule 13.09(1) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) and the inside information provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).
Reference is made to the announcements of the Company dated 18 October 2018, 10 January 2019, 23 January 2019, 8 February 2019 and 15 February 2019 concerning, amongst other things, the status of the debt securities and of the Company (the “Update Announcements”) and the joint announcement dated 5 June 2019 issued by the Company, together with its subsidiary, China Singyes New Materials Holdings Limited in relation to the agreement to acquire 1,687,008,585 newly issued ordinary shares in the Company (the “Subscription Shares”) by Water Development (HK) Holding Co., Limited (the “Subscriber”) (the “Joint Announcement”, together with the Update Announcements, the “Announcements”). Capitalised terms and expressions used herein shall have the same meaning as defined in the Announcements and the RSA (as defined below) unless defined herein.
Over the last few months, the Company and various of its creditors, stakeholders and respective advisors, have been in constructive dialogue and have worked expeditiously to agree on a restructuring of its indebtedness and a holistic recapitalization of the Group.
As a result, on 5 June 2019, the Company, together with its subsidiary, China Singyes New Materials Holdings Limited, issued the Joint Announcement in relation to the terms of a subscription agreement with, among others, the Subscriber, pursuant to which the Company has conditionally agreed to allot and issue to the Subscriber and the Subscriber has conditionally agreed to subscribe for, at Completion (as defined in the Joint Announcement) the Subscription Shares, representing approximately, 66.92% of the issued share capital of the Company as enlarged by the allotment and issuance of the Subscription Shares (assuming there is no change in the issued share capital of the Company other than the issue of the Subscription Shares from the date of the Joint Announcement up to Completion), for a total consideration of approximately HK$1,552,047,898 (the “Proposed Equity Transaction”).
In parallel, progress has been made with a number of major holders of the 2018 Notes, 2019 Notes and 2019 CBs (collectively, the “Offshore Notes”) and the Subscriber on the terms of a financial restructuring of the Company and the Group. These have culminated an in-principle agreement on the terms of the restructuring of the Offshore Notes (the “Proposed Restructuring”). The Proposed Equity Transaction and the Proposed Restructuring when completed will provide the Company and the Group with sustainable capital structure to deliver long-term value for all of its stakeholders.
The Company is therefore pleased to announce the terms of the Proposed Restructuring, together with the restructuring support agreement (“RSA”) which the Company intends to enter into with the holders of the Offshore Notes to support the implementation of the Proposed Restructuring.
The Proposed Restructuring
The terms of the Proposed Restructuring are set out in the section headed “Term Sheet” in Schedule 5 to the RSA (the “Term Sheet”). The RSA has been signed by certain holders of the Offshore Notes, and various other holders have indicated their support for the Proposed Restructuring as set out in the Term Sheet.
The Proposed Restructuring is expected to be implemented through inter-conditional and parallel schemes of arrangement in Bermuda and Hong Kong (the “Schemes”), together with any ancillary recognition proceedings in the relevant jurisdictions for the purposes of obtaining cross border relief where applicable (together, the “Restructuring Proceedings”). A Scheme of Arrangement is a statutory mechanism which allows the relevant court to sanction a “compromise or arrangement” which has been voted upon by the relevant classes of creditors and approved by the required majorities, it is not an insolvency procedure. The Restructuring Proceedings shall occur concurrent to, and are also inter-conditional with the progress and completion of the Proposed Equity Transaction. The Company expects to commence the process of implementing the Proposed Restructuring on terms set forth in the RSA as soon as possible.