Suntech files for provisional liquidation in Caymans

Nov 6, 2013 - Chinese group Suntech Power Holdings Co Ltd (NYSE:STP) said today it had filed for provisional liquidation with the Grand Court of the Cayman Islands and added that it might also seek Chapter 15 protection in the US.

If the application is approved, the photovoltaics (PV) maker will enjoy a certain level of protection and will receive more time to finalise its restructuring efforts “in the best interests of all stakeholders,” it said. Just last week, Suntech said it “intends to challenge” the petition from earlier in October in which several US bondholders of the company insist that it enters involuntary bankruptcy under Chapter 7.

In today’s statement Suntech noted that it had already arrived at an understanding with a group of creditors that envisages the exchange of debt for equity. The company also intends to find a new strategic investor to provide financial support in order to wrap up the restructuring process.

In mid-March 2013, Suntech failed to make the principal payment on a USD-541-million (EUR 400.5m) bond, touted as the first bond default for a China-based company. A few days later Wuxi Suntech, the firm’s principal unit in China, entered insolvency proceedings and restructuring. Chinese peer Shunfeng Photovoltaic International Ltd (HKG:1165) in late October agreed to buy that subsidiary for CNY 3 billion (USD 492m/EUR 365m).

(CNY 10 = USD 1.641/EUR 1.215)

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