KWG Group Holdings announced in a Hong Kong Stock Exchange filing that it has reached a preliminary agreement on the key terms of a comprehensive offshore debt restructuring plan with an ad hoc group of noteholders.

Members of this group collectively hold or control more than 25.8% of the total outstanding principal amount of the applicable debts.

The restructuring plan involves the company's offshore debts, which include $3.95 billion in senior notes, $380 million in syndicated loans, and $334 million in other loan financings.

The restructuring plan proposes to offer holders or lenders of the applicable debts two option schemes to convert their debt into the following forms:

Under Option One, for every $100 of principal debt held by a creditor, $0.87 will be converted to cash, $29 will be converted to zero-coupon exchangeable notes, $20 will be converted to zero-coupon mandatory convertible bonds (MCB), and the remaining principal amount will be written off.

The maximum amount of applicable debt principal that can be allocated to Option One is $1.38 billion.

Under Option Two, 100% of the applicable debt principal held by a creditor will be converted into MCBs. Holders of MCBs may voluntarily convert them into newly issued shares of the company at a conversion price of HKD 1.55 per share.

As part of the restructuring, the company will conduct a rights issue before the effective date of the restructuring. The proceeds from the rights issue will be used to pay for expenses related to the restructuring.