Embattled Chinese solar manufacturer Suntech enjoyed a slice of rare good news on Monday when its main European subsidiary won itself a further six months to negotiate with creditors.
Suntech Power International Ltd, the Euro subsidiary of the stricken Suntech Power Holdings Co. Ltd, had been given a provisional, two-month, moratorium on its debts on April 9 and has used that stay of execution, according to Suntech CEO David King to meet ‘important milestones in the restructuring process.’
On Monday, the authorities in Schaffenhausen, in Suntech Power International’s Swiss base, gave the company a definitive moratorium on debts which will last for six months and could then be further extended.
In a statement to the U.S. Securities and Exchange Commission to which the parent company, which is registered on the New York Stock Exchange has to account Suntech Power Holdings Co. Ltd. said that the majority of the European company’s debts were inter-company Suntech monies.
"The definitive moratorium allows SPI time to restructure debt and reach an agreement with creditors," King said in the SEC statement, adding: "SPI will continue normal operations during this process."
Suntech’s main Wuxi business unit filed for insolvency on March 18 after the parent company defaulted on US$541 million worth of 3% convertible bonds less than a week earlier.
Local creditors claim they are owed $2.5 billion by the former panel giant.