Liquidators question Suntech deal

Chinese PV group Shunfeng is consulting its lawyers after another apparent twist in its efforts to acquire Wuxi Suntech, the insolvent main manufacturing unit of fallen module giant Suntech.

Shunfeng has received a letter from provisional liquidators of Suntech Power Holdings – the global parent group incorporated in the Cayman Islands – stating that any deal to transfer Wuxi Suntech’s assets does not have their approval.

The liquidators – two accountants from PriceWaterhouseCoopers appointed by a court in the Caymans – also gave notice that they will “investigate and pursue” the parent group’s right to transfer ownership of Suntech Power Japan and Suntech Power Investments to Wuxi Suntech – and hence to Shunfeng.

The liquidators told Shunfeng that transfer “may be voidable under British Virgin Islands law”.

The intervention by the Caymans liquidators is another headache in the tortuous efforts to restructure Suntech, until a few years ago the world’s biggest supplier of PV modules.

That restructuring – heavily guided by the Chinese authorities – centres around the $492m acquisition by Shunfeng of Wuxi Suntech, its principal unit which is based in the city of Wuxi.

Shunfeng revealed the latest twist in a filing to the Hong Kong Stock Exchange today.

Earlier this week Shunfeng told its shareholders the acquisition had been approved by Suntech's creditor in China.

Responding to the Caymans intervention, the company said today that as far as it is concerned the deal to buy Wuxi Suntech falls under Chinese bankruptcy laws.

The Caymans liquidators should raise any objection with the unit’s administrator or the Wuxi Intermediate People’s Court, which is overseeing the bankruptcy process in China, it said.

Shunfeng added: “The company will consider the situation further, including discussing the matter with the administrator and obtaining relevant legal advice.”

The Chinese-led efforts to unravel Suntech are already being challenged by a group of American creditors, which has launched a court action in New York to try to force the company into bankruptcy in the US.