Former solar giant Suntech Power Holdings has signed an agreement with the U.S.-based holders of unpaid convertible notes in the company whom had petitioned for Suntech to be placed in involuntary bankruptcy.
U.S. investors with notes amounting to $1.6 million, due at the end of 2013, had filed a petition under Chapter 7 of the U.S. bankruptcy code in the southern district court of New York.
Suntech Power Holdings the rump of former PV world leader Suntech after the sale of the Chinese Wuxi Suntech manufacturing business to Shunfeng Photovoltaic International announced on Friday it has signed an agreement to dismiss the Chapter 7 filing after negotiations with the petitioners.
Under the terms of the restructuring support agreement, the filing will be dismissed in return for the notes held by the petitioners being treated on an equal footing with Suntech's other, mostly Chinese, creditors and with Suntech dropping its appeal against a judgement relating to settlement of the notes, secured by the petitioners in September.
The agreement means the provisional liquidators of the Chinese-owned but Cayman Islands-registered company can proceed with a restructuring in line with the provisional liquidation proceeding filed in its Caribbean base under Chapter 15 of the U.S. bankruptcy code.
The agreement can be torn up, however, if Suntech fails to file its Chapter 15 petition by February 21, an order obtaining recognition of the Cayman Islands restructuring is not entered by the U.S. Bankruptcy Court by May 31 or the Cayman Islands restructuring is not approved by December 31.
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