HONG KONG, Feb 9 (Reuters) - Nine Dragons Paper (Holdings) Ltd (2689.HK) will buy back $284 million of its 2013 bonds at 53 cents to the dollar, China's biggest paper board producer said in a stock filing on Monday.
Holders of the bonds have until Feb. 23 to sell back their debt. After that deadline, Nine Dragons will pay 48 cents to the dollar for any sellers of the debt until March 9.
Nine Dragons sold $300 million of the 7.875 percent 2013 bonds in April, but the debt has tumbled since then due to concerns about the paper board producer's financial standing.
The bonds <65439EAA1=> were quoted at 30 cents to the dollar as of last week.
Nine Dragons is expected to pay out about $160 million for the buyback, and could book a capital gains profit of $133.4 million should all investors sell their debt, BNP Paribas' analyst Winston Herrera said in an email to clients.
Nine Dragons already bought back about $16 million of the debt in the open market in December, having paid around 35 cents to the dollar then, according to BNP estimates.
Since it sold the bonds in April, Nine Dragons lost its investment-grade ratings from Standard & Poor's and Fitch Ratings, which cited the paper board maker's debt levels at a time of weakening profitability as reasons for their downgrades.
Nine Dragons has been hit hard by declining sales and the rising costs of raw materials.
The company is in the midst of plans to repay debt early, cut capital spending and delay capacity expansion plans.
Merrill Lynch, which underwrote the initial bond sale, will handle the buyback, according to the filing. |
