World’s former largest solar panel manufacturer applies for liquidation in Cayman
Reuters are reporting that Suntech Power Holdings Co Ltd, once the world’s largest maker of solar panels, has said it had filed an application for provisional liquidation in the Cayman Islands, where the New York-listed Chinese company is incorporated.
Update 2 -Suntech applies for provisional liquidation in Cayman Islands
Nov 6 (Reuters) – Suntech Power Holdings Co Ltd, once the world’s largest maker of solar panels, said it had filed an application for provisional liquidation in the Cayman Islands, where the New York-listed Chinese company is incorporated.
Suntech also said it would consider pursuing a filing in the United States that would allow U.S. courts to recognize a foreign bankruptcy as the main proceeding and block creditors from seizing the company’s U.S. assets.
Suntech shares fell 14 percent to $1.29 on Wednesday morning on the New York Stock Exchange, way below their life high of $86.28 in December 2007.
“We do think this is the end for Suntech,” Raymond James analyst Ryan Berney said.
Shunfeng Photovoltaic International Ltd agreed last week to buy Suntech’s main manufacturing unit, Wuxi Suntech, for $492 million, leaving Suntech with few other assets.
Wuxi Suntech was dragged into bankruptcy proceeding by Chinese creditors in March, days after Suntech defaulted on a principal payment on $541 million of convertible bonds.
“Shunfeng is buying essentially all of Suntech’s production capacity and technology portfolio, apparently leaving the U.S.-listed holding company a quasi-empty shell,” Berney said.
After the sale of its main manufacturing unit, Suntech is left with little more than its U.S. sales and distribution business and an investment company that holds solar power plants in Italy.
However, some of these plants are under investigation in Italy for illegally availing state subsidies.
“By commencing such proceeding in the Cayman Islands, the company will have the benefit of protection and additional time to complete negotiations and conclude the restructuring in the best interests of all stakeholders,” Suntech said on Wednesday.
The company, which has been unable to recover from a steep slide in panel prices caused by global oversupply, said last week that it would contest a bankruptcy petition filed against it in the United States by some bondholders.
A group of four U.S. bondholders made the filing for liquidation after Suntech repeatedly deferred payments on its overseas bonds.
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Suntech defaults on US$541 million bond; shares plummet
From PVTECH
Suntech Power Holdings officially said for the first time that it would not pay holders of its US$541 million convertible note due today.
Financials
Suntech Power Holdings officially said for the first time that it would not pay holders of its US$541 million convertible bonds due today.
The company made the statement in response to a New York Stock Exchange request to explain the unusual trading activity of Suntech’s stocks, which at one point were down 24% yesterday but ended the trading day down 19% and below the US$1.00 level.
Suntech said in a brief statement that it continued to engage with over 60% of bond holders, having claimed to have negotiated a two-month stay on repayment to restructure the deal.
However, numerous reports have since highlighted that remaining bond holders had claimed not to have been contacted by Suntech and expected to be paid today, or start legal proceedings to force the company into involuntary bankruptcy.
Reports in China continue to support rumours that Suntech’s multiple subsidiaries, notably in Wuxi would be taken over by the local government via selective bankruptcies. Suntech has not confirmed or denied such reports.
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http://www.pv-tech.org/news/suntech_defaults_on_us541_million_convertible_note_shares_plummet
