Embattled Singyes Solar outlines debt restructuring plan

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Debt-saddled Chinese solar project developer and building-integrated PV manufacturer Singyes Solar has announced the details of a proposed restructuring it hopes will enable it to resume normal operations this year following a state bailout.

In an update to the Hong Kong Stock Exchange where the Guangdong-based company is listed, Singyes offered creditors holding almost $430 million of defaulted senior notes and convertible bonds a $50 million portion of the cash owed them up front – to be divided among them – plus new three-year notes to the value of the rest of their original investment.

The company is in default for $260 million of 7.95% senior notes due to be settled this year, $155 million related to $160 million of 6.75% notes due last year and RMB96 million ($14 million) of RMB930 million of 5% convertible bonds due this year.

Singyes has offered creditors a slice of an $8.6 million “consent fee” to try to secure the support of the holders of at least 75% of the monies owed for a debt restructuring scheme which, it assured investors, “is not an insolvency procedure”.

$50m up front

If the plan is waved through, creditors would receive a pro rata proportion of a $41.4 million settlement fee plus new notes to the value of the money owed them – minus the funds already received. Those notes would offer 2% annual interest – or 4% payment in kind, would see 40% of their value mature after two-and-a-half years and the balance six months later. In the event of Singyes being de-listed from the Hong Kong exchange, the new notes would have to be settled in full.

The debt restructure plan hinges on the completion of a bailout of the company by Chinese state owned Water Development (HK) Holding Co Ltd, part of the Shuifa Group of entities owned by the State-Owned Assets Supervision and Administration Commission of the State Council of Shandong province.

State-backed bailout

Water Development plans to pay HK$1.55 billion (US$198 million) for a 66.92% stake in an enlarged Singyes but that move depends on the target company’s shareholders agreeing to waive a requirement the state-owned body would have to bid for its remaining shares and for subsidiary China Singyes New Materials Holdings Ltd, under takeover rules.

An update on when the meeting to approve the bailout will take place has been promised by Singyes on or before August 7 and creditors willing to back the connected debt restructure plan must indicate their intent by August 9.

Trading in Singyes shares continues to be suspended as the company has yet to produce accounts for last year. Singyes announced on Sunday its negotiations with creditors have further delayed the 2018 figures, with August 9 now the anticipated publication date. The default on the senior notes and convertible bonds in question is reported to have triggered cross defaults to the tune of a further RMB990 million among the company’s lenders.