Country Heights Holdings Bhd has deferred a critical bondholders meeting intended to seek their approval for a lump sum redemption of its entire RM200mil redeemable unsecured bonds at maturity on Dec 31, 2005, instead of a yearly RM50mil redemption until maturity.
The company said the deferment of the meeting scheduled for today was to give its substantial shareholder and managing director, Tan Sri Lee Kim Yew, more time to complete his acquisition of all outstanding bonds.
Another reason was that the bondholders would not agree to shorten the notice period for the meeting, it said,
Lee, who offered to personally acquire the bonds (at 88 sen for every RM1 nominal value) after the company failed to persuade its bondholders to extend the time period for a RM50mil redemption due on Dec 31, 2002 to Dec 31, 2005, said bondholders with RM108mil nominal value, or 54%, of the total RM200mil bonds had accepted his offer as at last Friday.
Nine out of 17 bondholders have so far accepted Lees offer. They include the largest bondholder, Mayban (Nominees) Sdn Bhd with RM56mil of bonds or 28% of the total, Universal Trustee (Malaysia) Bhd with RM20mil or 10%, and Affin Bank Bhd and Prudential Assurance Malaysia Bhd with RM8mil or 4% each.
Lee is understood to have paid 1% of the purchase consideration to the bondholders as a deposit, with the balance of over RM94mil payable a month later.
In an announcement to the KLSE yesterday, Country Heights said the remaining bondholders were still in negotiations with Lee and, as such, the bondholders meeting to seek their approval of a lump sum redemption would be delayed until after the completion of the respective sale and purchase agreements.
The bonds, which were originally rated A3 but progressively downgraded to B2 and collateralised by assets worth RM556mil, were due to have been redeemed by the company using the proceeds from a proposed rights issue and divestment of up to a 49% stake in subsidiary Mines City Hotel Sdn Bhd through an initial public offering (IPO). However, the company said the IPO had to be delayed due to poor stock market conditions.
A November report by PricewaterhouseCoopers Consulting Sdn Bhd as the financial monitoring accountant in respect of the bonds said the cash position of Country Heights did not appear to support the payment of the RM50mil due on Dec 31, 2002.