NAFMII released Notice on the Trial Implementation of Cash Tender Offer in China's Non-financial Enterprise Debt Financing Instruments Market
The trial implementation measures for cash tender offer were formulated based on domestic market realities while incorporated international best practices. The Notice provides detailed working procedures for cash tender offer. It forbids any illegal profits obtained by issuers in the cash tender offer process through price manipulative actions such as insider trading, fraud, etc.. It is clearly stated that issuers should not be selective when performing debt obligations so as to protect the legitimate interests of creditors of outstanding debts.
In the circumstances that: a) the prospectus of underlying debt and other offering documents did not contain cash tender offer arrangements; b) the net purchase price is lower than the remaining principal of the face value of the underlying bond, the issuer shall, before the intended tender offer effective date, provide bondholders with reasonable ways to take collective action and solicit bondholders opinions expressed through resolution or through other means on whether the issuer could carry out tender offer.
The full text of the Notice in Chinese could be found through the following link.
http://www.nafmii.org.cn/ggtz/tz/202011/P020201102585173253848.pdf
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