Heavily-indebted PV project developer Singyes Solar appears to have lined up all its ducks with respect to its plans to submit to a Chinese state bail-out and renegotiate with its creditors.
Independent shareholders yesterday gave their backing to a HK$1.55 billion (US$198 million) bail-out by Beijing-owned Water Development (HK) Holding Co Ltd. Under the terms of the deal, the new owner would control 66.92% of the stock in Singyes, with current chief shareholder Strong Eagle, for example, seeing its 24.43% stake diluted to 7.99-8.08%, depending on various as-yet unactivated share options and convertible bonds.
Strong Eagle is 53% owned by Singyes chairman and executive director Liu Hongwei, who would stay on the board – along with the independent non-executive directors – despite recent shareholder disquiet with his performance.
Fellow, 9% Strong Eagle stock holders Xiong Shi and Zhuo Jianming would step down from the board upon completion of the bail-out, along with Li Hong.
Twin turnaround plan
The fate of the bail-out, and Singyes itself, now hinges on the result of negotiations with the holders of almost US$430 million in defaulted senior notes and convertible bonds. A fortnight ago Singyes said it had persuaded the holders of 94.5% of that defaulted debt to indicate acceptance of its offer to settle the outstanding amounts over a longer period of time.
Hong Kong-listed Singyes today confirmed the High Court of Hong Kong and the Supreme Court of Bermuda – the tax haven where the business is registered – had approved plans for a meeting of Singyes creditors to be held in Hong Kong on November 25, to vote on the debt reorganization scheme.
However, the Hong Kong branch of German lender Deutsche Bank could still put a fly in the ointment. Singyes is due back at the Hong Kong High Court on Monday to face a winding-up petition filed by Deutsche Bank over US$6.27 million the lender says the troubled solar company owes it. Singyes disputes the claim.