Hong Kong developer Road King defaults after creditors reject debt amendments
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The firm failed to win enough creditor consent for debt amendments aimed at easing short-term cash strain and missed interest payments on two notes due in July, it said in a filing with the
Hong Kong stock exchange on Thursday. The company said it would suspend all principal and interest on its offshore bank debt, notes and perpetual securities 'to ensure fair and equitable treatment of all offshore creditors'.
The developer had US$1.51 billion in offshore debts, which included bank loans and notes, plus US$890.5 million in perpetual securities. It will suspend payments on US$22.62 million in interest, with deferred distribution on the perpetual securities amounting to US$56.46 million.
The decision could prompt creditors to demand quicker repayment or take other actions, though the company said it had not received any such notices. Road King would 'explore a holistic solution' to address its current challenges, but did not intend to use proceeds from asset sales to repurchase its notes and perpetual securities. Instead, it would use such proceeds to fund a broader restructuring.
The company said it aimed to discuss restructuring terms with a small group of creditors, starting with the bondholders who provided feedback on earlier proposals. It also welcomed discussions and constructive dialogue with other creditors, it added.
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