Boyuan Announces Proposal to Amend the Terms of its 10.0% Convertible Unsecured Subordinated Debentures due October 31, 2015
TORONTO, Jan. 22, 2015 /CNW/ - Boyuan Construction Group, Inc., ("Boyuan" or the "Company") (TSX: BOY, BOY.DB.A), a growing construction company in China of commercial, residential and municipal infrastructure projects, announced today that it will seek approval from holders of its 10.0% convertible unsecured subordinated debentures due October 31, 2015 (BOY.DB.A) (the "Debentures") to amend the terms of the Debentures at a meeting of the holders of the Debentures (the "Debentureholders") to be held on February 24, 2015 (the "Meeting").
The proposed amendments (the "Amendments") to the Debentures consist of:
(i) |
EXTENDING the maturity date of the Debentures from October 31, 2015 to October 31, 2018; |
(ii) |
REDUCING the conversion price from $2.60 to $1.00 per share of the Company; |
(iii) |
INCREASING the coupon rate to 10.5% from 10.0%; and |
(iv) |
EXTENDING the restricted redemption period to October 31, 2016. |
Other than the foregoing Amendments, the terms of the Debentures will remain unchanged. The Amendments will also be subject to the approval of the Toronto Stock Exchange (the "TSX").
Paul Law, the Company's Chief Financial Officer stated: "We at Boyuan are very excited about the growth opportunity currently available to the Company. By extending the maturity of the Debentures the Company would be provided with increased financial flexibility to capitalize on the attractive growth opportunities that have been procured by the Company's management team. In addition, we believe that the Amendments will provide Debentureholders with a longer period of time during which to receive, what we believe to be, an attractive yield. Based on the current low interest rate environment we believe that the 10.5% coupon provides returns that are superior to other convertible debentures investments in the Canadian market."
Normal Course Issuer Bid
In addition, Boyuan announced today that, subject to approval of the TSX, it intends to make a normal course issuer bid ("NCIB") for the Debentures if the Amendments are approved by Debentureholders at the Meeting.
Paul Law stated: "There were times over the last four years where the trading price of our Debentures did not reflect what we believed to be fair value. As a result, we believe that an NCIB for the Debentures will allow us to take advantage of scenarios where, in the opinion of our management team, the Debentures appear to be underpriced."
Board Recommendation
The Board of Directors of the Company (the "Board") believes that the Amendments provide a number of benefits to the Company and its securityholders, including to the Debentureholders.
The Board UNANIMOUSLY RECOMMENDS that the Debentureholders vote FOR the Amendments.
Details About the Amendments
The record date for determining the Debentureholders entitled to receive notice of and vote at the Meeting is January 21, 2015. Further information with respect to the Amendments will be outlined in a management information circular (the "Circular") expected to be made available under the Company's profile on SEDAR at www.sedar.com and mailed to the Debentureholders in January 2015. For the Amendments to be approved, at least 75% of the principal amount of the Debentures voted (either in person at the Meeting or by proxy) must be FOR votes.
Detailed voting instructions will be found in the Circular and accompanying proxy form or voting instruction form. The Meeting is scheduled to be held on February 24, 2015 at 10:00a.m. (Easter Standard Time) at the offices of Fogler, Rubinoff LLP, 77 King Street West, 30th Floor, TD North Tower, Toronto-Dominion Centre, Toronto, Ontario, M5K 1G8.
About Boyuan Construction Group, Inc.
Based in Jiaxing City, China, Boyuan Construction Group, Inc. is in the business of commercial building and residential construction, municipal infrastructure and engineering projects. In its last three fiscal years ending June 30, 2014, Boyuan completed 45 projects for a number of private and public sector clients. Boyuan's current project backlog includes residential, commercial, industrial and mixed-use developments. From its operating bases in Zhejiang Province and in Hainan Province, Boyuan focuses on construction projects in China's fast-growing regions of the Yangtze River Delta, Hainan Province and Shandong Province. For more information visit www.boyuangroup.com.
Caution Regarding Forward-Looking Information:
Certain information contained in this press release constitutes forward-looking information, which is information relating to future events or the Company's future performance and which is inherently uncertain. When used in this press release, such statements may use such words as ''may'', ''will'', ''expect'', ''believe'', ''plan'' and other similar terminology. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this press release. Forward looking information in this press release includes, but is not limited to, expected terms of the Amendments; expected date and other details of the Meeting; management's expectation on the effect of the Amendments in increasing management's financial flexibility to capitalize on the growth opportunities; management's belief on Debentureholders benefiting from an attractive yield and other benefits from the Amendments; management's intention to implement a NCIB for the Debentures; management's belief of the Debentures to provide superior return; and management's belief on the effect of the NCIB on the trading price of the Debentures. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. The Company believes the expectations reflected in the forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and readers are cautioned not to place undue reliance on forward-looking information contained in this press release. Some of the risks and other factors which could cause results to differ materially from those expressed in the forward-looking information contained in this press release have been identified in the Company's AIF for the fiscal year ended June 30, 2014 and in the Company's other public disclosure documents filed with certain Canadian securities regulatory authorities and available at www.sedar.com. The forward-looking information contained in this press release is made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as otherwise required by law.
SOURCE Boyuan Construction Group, Inc.
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Boyuan Construction Group, Inc, Mr. Paul Law, CFO, +(852) 9329 5088, [email protected]; TMX Equicom, Katelynn Thissen, (416) 815-0700 ext. 276, [email protected]
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