What next for Suntech?18. March 2013 | Global PV markets, Industry & Suppliers, Investor news, Markets & Trends | By: Max Hall
Today Chinese photovoltaic module manufacturer Suntech finally admitted it had received notice of default over the US$541 million worth of 3% convertible bonds, which went unpaid on Friday.
Despite managing to persuade holders of more than 60% of the bonds to hold over until May 15 for payment, Suntech confirmed it had received a notice of default and acceleration from bond trustee Wilmington Trust.
The press release announcing the default notice went on to state, "Such event of default has also triggered cross-defaults under Suntech's other outstanding debt, including its loans from (the) International Finance Corporation and Chinese domestic lenders."
Suntech CEO David King put a positive spin on the situation and stressed that the solar module giant is still hopeful of reaching a negotiated settlement with creditors.
In the company statement King said, "It is currently a very difficult time for our company and our industry, but the management and board of Suntech are committed to finding a way forward that will take into account the rights and interests of all of its constituents, including shareholders, noteholders, lenders, customers, suppliers and employees.
"We are currently exploring strategic alternatives with lenders and potential investors, which could help to set us on a path towards longer term success. We appreciate the support and understanding of our various stakeholders as we undertake efforts to implement these measures."
In a further alarming note for investors, however, the released revealed, "Suntech is in discussions with certain of its suppliers and lenders relating to various other claims for non-payment or non-performance, which the company hopes to resolve in a timely manner."
Suntech watchers are now waiting to see what further action will be taken by those among the 40% of bondholders who did not accept last week's forbearance agreement, with solar industry commentators predicting a filing for involuntary bankruptcy followed by a possible bailout by the government of the Wuxi city where the manufacturing giant is based.
pv magazine's attempts to contact Suntech went unanswered.
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