Narrative
Full Description
Project narrative
On December 1, 2015, Specialist Machine Developments (SMD) Limited — an England and Wales-incorporated deep-sea robot and subsea engineering machinery manufacturer based in New Castle, England and wholly-owned by CRRC Times Electric (Hong Kong) Co., Ltd., a Hong Kong-incorporated Chinese state-owned company and a wholly-owned subsidiary of Zhuzhou CRRC Times Electric Co., Ltd. (TEC), a Chinese state-owned company specializing in mass transit electric drive converter and control systems and subsidiary of CSR Corporation Limited — issued £60,000,000 GBP series 'A' unsecured loans notes (a debenture) on the Official List of the Channel Islands Securities Exchange Authority, which were subscribed by and issued to CRRC Times Electric (Hong Kong). This loan notes were scheduled to mature on November 20, 2035 (20-year maturity period), redeemable at par value and bore interest at a rate of 4%, payable annually in arrears on December 31, with the first interest payment due on December 31, 2016 and each year thereafter until maturity. In 2015, SMD accrued £203,836 GBP in interest on the loan notes. It paid that interest in December 2016. In 2016, SMD accrued £2,400,000 GBP in interest on the loan notes. It paid that interest February 2017.
Staff comments
1. Loan notes constitute a particular type of debt security called a debenture. A debenture is a debt instrument used by a lender, such as a bank, when providing capital to companies and individuals. It enables the lender to secure loan repayments against the borrower’s assets – even if they default on the payment. A debenture can grant a fixed charge or a floating charge. A fixed charge is normally taken out against a tangible asset such as property. It enables the lender to take ownership of the borrower’s assets and sell them off in the event of a payment default. With a fixed charge, the borrower would not be able to sell the asset without the lender’s consent. A floating charge – which is usually attached to assets such as shares, raw materials and intellectual property – implies that the assets may change over time, and the borrower can sell them without the lender’s intervention. However, floating charges may become fixed if the borrower defaults. 2. On April 9, 2015, CRRC Times Electric (Hong Kong) Co., Ltd. acquired the entire share capital of SMD Limited. China Eximbank issued a loan for this, as captured by Record ID#101501.