|A Major Initiative for Potential Equity Acquisition and Strategic Expansion into the European Market|
HONG KONG, July 21, 2016 - (ACN Newswire) - Chiho-Tiande Group Ltd ("Chiho-Tiande" or the "Group") (HKSE:976), a leading global mixed metal scrap recycler, and Scholz Holding GmbH ("Scholz") have entered into a restructuring agreement in relation to (1) finalization of terms of the bridging loan; (2) amendment to the maturity dates, and partial waiver, of the Debt; and (3) the intended acquisition, and waiver, of the TTC Loan. The restructuring agreement would maintain Scholz's scope of business prior to a potential equity acquisition by Chiho-Tiande and enhance Scholz's financial performance in the long-term.
(1) Finalization of terms of the bridging loan agreement
Chiho Renewable Development Ltd ("CRDL"), an indirect wholly-owned subsidiary of the Group, and Scholz Recycling GmbH & Co. KG ("Scholz Recycling"), a wholly-owned subsidiary of Scholz, entered into a bridging loan agreement for the provision of loan amounting up to EUR80 million (equivalent to approximately HK$712 million). The amount represents an increase of EUR30 million (equivalent to approximately HK$267 million) from what was initially set out in the Debt Purchase Agreement in order to enable Scholz to meet its liquidity requirements without increasing the overall commitment by the Group.
(2) Amendment to the maturity dates, and partial waiver, of the Debt
The Group and Chiho-Tiande Resources Ltd. ("CTRL"), an indirect wholly-owned subsidiary of the Group, have agreed to amend and extend the maturity dates of certain loans under the Debt. The maturity date of the outstanding nominal value of the Debt amounting to approximately EUR224 million (equivalent to approximately HK$2.0 billion) is to be extended to the earlier of 31 January 2017 and the date when the last closing condition under the Restructuring Agreement is fulfilled or waived. In addition, CTRL will agree to irrevocably waive EUR224 million (equivalent to approximately HK$2.0 billion) of the Debt and the relevant interest in a debt waiver agreement which will be entered into with Scholz on the Restructuring Closing Date.
Besides, the maturity date of the outstanding nominal value of the Debt amounting to approximately EUR300 million (equivalent to approximately HK$2.7 billion) is to be extended to the earlier of 31 January 2017 and the date on which the last closing condition for the Potential Equity Acquisition has been fulfilled or waived. Following the Potential Equity Acquisition, the maturity date for the approximately EUR300 million (equivalent to approximately HK$2.7 billion) outstanding nominal value of the Debt will be deferred for a period of 24 months under an amendment agreement.
(3) The intended acquisition, and waiver, of the TTC Loan
As a strategic restructuring step, CRDL intends to acquire a EUR60 million TTC Loan (equivalent to approximately HK$534 million) from Scholz Beteiligungsgesellschsaft for a nominal consideration of EUR1 under a separate agreement prior to the Restructuring Closing Date, and to enter into a loan waiver agreement with immediate effect on the Restructuring Closing Date.
"The new structure is deemed necessary to facilitate the significant deleveraging of Scholz and maintain a sustainable and profitable development of that company in the future," Mr. Tu Jianhua, Chairman of Chiho-Tiande Group Limited, said. "The provision of the bridging loan and restructuring agreement are part of a series of steps to prepare for the potential acquisition of Scholz Group. The acquisition of one of the largest European-based global networks of companies and affiliates active in the field of treating and processing scrap metal can expand our business by accessing upstream materials supplies and technology as well as tapping European markets. Thus we are confident we can gain greater growth momentum in order to boost our returns on the investment, and ultimately deliver satisfactory returns to our shareholders in the future."
About Chiho-Tiande Group Ltd (HKSE:976)
Chiho-Tiande Group Limited is a global leading mixed metal scrap recycler, specializing in recycling, disassembling and processing of mixed metal scrap and reuse of resources. Its three major business areas are metal recycling, foundry production and wholesale. The Group is the largest mixed metal scrap recycler in China in terms of the total import volume and the actual import volume of mixed metal scrap approved by the Ministry of Environmental Protection, and also the largest importer of mixed metal scrap for importing, recycling, reusing and processing. USUM Investment Group Hong Kong Limited, indirectly owned by Mr. Tu Jianhua, is the single largest shareholder of Chiho-Tiande. For more information, please visit http://www.chiho-tiande.com.
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July 21, 2016 01:20 HKT/SGT
Topic: Loans & Financing
Sectors: Metals/Mining, Daily News
From the Asia Corporate News Network
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