Stressed Chinese Oil Firm Sweetens Bond Offer Ahead of Maturity
(Bloomberg) -- Chinese oil exploration company MIE Holdings Corp. extended the deadline of its bond exchange offer and added incentives for investors to participate as it struggles to repay a dollar bond next month.
The Beijing-based firm pushed back the expiration date on the exchange offer for its $315.9 million senior notes by one week to March 29, according to a company filing. It also agreed to purchase as much as $30 million of the new notes after it completes disposing some of its assets.
The exchange offer for the 2019 notes is necessary to avoid payment default by April, Fitch Ratings said in a note earlier this month. The bonds have plunged about 30 cents on the dollar in the past year to be indicated at 57.2 cents on Monday, indicating investor concern on debt payments. If the exchange offer is unsuccessful, MIE will pursue alternative arrangements which may include a restructuring, according to in the filing.
“The extension of the offer deadline could signal that existing investors are pushing for better terms, and that there is insufficient interest among holders to tender under current terms,” said Leonard Law, an analyst at Lucror Analytics in Singapore. Law said the added clause as sweetener is not binding due to the vague wording and the company’s ability to carry out the buyback still depends on its asset disposal. An MIE Holdings finance department official didn’t immediately reply to an email seeking comment.
An MIE Holdings finance department official didn’t immediately reply to an email seeking comment.
* MIE on March 1 announced its offer to exchange the existing 7.5 percent notes percent with new three-year bonds paying 13.75 percent.
* This follows an earlier move to amend the put option date on its HK$340 million ($43.3 million) convertible bond to after March 15.
* The company has bled cash in the past 12 months and it generated net losses for three straight semi-annual period to June 30, according to Bloomberg-compiled data.
* The debt exchange requires acceptance level of no less than 90 percent of the outstanding principal amount, and comes with an upfront partial cash repayment incentive.
2019-03-25 05:53:42.339 GMT
By Lianting Tu and Annie Lee