Chinese polysilicon manufacturer GCL-Poly this morning announced the holders of almost 92% of US$500 million worth of defaulted senior notes have signed up to a plan to postpone most of the settlement for three years.
GCL defaulted on the Hong Kong-issued, three-year senior notes on January 30 and gave the holders of the investments until yesterday to agree to a debt restructuring plan termed the Bermuda Scheme, in reference to the tax haven where the company is registered.
The company this morning confirmed the holders of 91.85% had signed up to a deal which will see them paid a fixed fee of US$50 for every US$1,000 of notes they hold plus take a pro rata share of a US$17.8 million fund. As part of the arrangement, GCL will also set aside a separate US$4.5 million to cover the fees of Houlihan Lokey, Hogan Lovells and Moorlander Consulting Limited as advisors to certain of the creditors.
The defaulted senior notes will be exchanged for fresh investments offering a higher, 10% return which will mature on January 30, 2024. The company added, note holders who missed the signatory deadline yesterday can still agree to the arrangement but will not receive the fixed fee paid to those who committed on time.
GCL had on Friday revealed the formation of a bondholder committee representing the holders of more than half the value of the defaulted notes. A revision to the planned debt restructure was made, under which the bondholder committee would have to approve in writing any further amendments to the Bermuda Scheme.
The revised terms also permit the holders of more than 66.67% of the value of the defaulted notes to capsize the proposed debt restructuring if any deal milestones are missed and of the scheme to be abandoned by agreement between GCL and the holders of more than 75% of the senior notes.
GCL said yesterday the solar project sell-offs it had undertaken last year as it attempted to pay down debts could be expected to incur at least RMB800 million (US$124 million) of impairment losses but that the business was expecting an exchange rate gain of around RMB300 million for 2020 due to appreciation of the renminbi against its US-dollar-denominated commitments.
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