Road King Reaches Agreement With Lenders for 2Y Extension on Originally $367M-Equivalent Due September TL, Has Made Early Repayment on Same

Editor’s Note: This story was first published in the evening on Aug. 28 and has been republished in regular business hours to reach a wider audience.

Road King Infrastructure Ltd. said during a series of investor calls held on Tuesday, Aug. 27 that the company has reached an agreement with its lenders to extend by two years an originally $367 million-equivalent dual-currency amortizing term loan set to mature in September, and has also made an early repayment on the facility, according to four sources who attended the calls.

The facility, which comprises a HKD 300 million ($38.5 million) term loan and a $329 million term loan, was signed in 2021 and was originally scheduled to mature on Sept. 11, according to data shown on Refinitiv. Some of the facility has already been paid down via amortization, as reported.

Management told investors that under the agreement, about 50% of the facility will be repaid during the second half of the second year, with the rest to be gradually paid down, without providing further detail on the loan terms.

The company had previously proposed to lenders of the facility – which include Bank of Communications Hong Kong branch, China CITIC Bank, China Minsheng Bank, CMB Wing Lung Bank, Hang Seng Bank Hong Kong, HSBC Holdings, ICBC Asia, and Standard Chartered Bank Hong Kong – that it would extend the loan by around two years with a minimum 30% of the amortizing facility’s outstanding amount paid upfront, as Reorg reported on June 18.

On June 11, Road King launched a tender offer and consent solicitation, seeking to push out by 3.5 years the respective maturities of its five senior unsecured offshore bonds with $1.658 billion aggregate principal, as well as deferring the initial November 2024 reset date to May 2028 for $300 million 7.75% senior perpetual securities.

As part of the liability management exercise, the company said that it would undertake to use part of the proceeds from the possible eventual sale of certain assets to repurchase or redeem the extended notes, including stakes in four Indonesian toll roads, the Hong Kong Southland residential project and equity interest in a Shanghai Juanqi commercial project, as reported.

Management said on Tuesday’s calls that its Shanghai project has about $200 million of project funding which is expected to be released as early as mid-2025. The company has initiated talks with the State Administration of Foreign Exchange regarding approvals needed to wire funds offshore.

With regard to the Hong Kong Southland project, sales performance has been weak in the past two months and two more phases of the project are yet to launch, management said on the calls. As reported in the company’s interim results, sales of Southland had rebounded in the first quarter but plummeted sharply in the second quarter due to fierce promotion of competitive projects.

Management did not guide on the Tuesday calls on whether the company would continue to pay distributions on its perpetual securities, said the same sources.

For the six months ended June 30, Road King reported a 45% year-over-year decline in revenue of HKD 3.468 billion from HKD 6.277 billion for the first half of 2023. Gross loss was HKD 363.6 million for the first half of 2024, reversing a gross profit of HKD 694.1 million for the same period in 2023.

Road King did not respond to requests for comment as of press time.