Suntech looks for 'strategic investor'
Suntech has acknowledged it is working to find a strategic investor to help bail it out, as it yet again extended its “forbearance agreement” with holders of bonds worth more than half a billion US dollars.
The latest extension buys the bankrupt Chinese PV giant another two months – until 30 August – before its bonds come due.
By missing a 15 March deadline to repay those bonds, Suntech became the first major Chinese company to default on its corporate bonds, and its principal Chinese manufacturing subsidiary was subsequently forced into insolvency as a result.
The company says, however, that it is making progress in negotiating a debt restructuring plan with bondholders.
It also confirms that it is working with its bondholders to identify “strategic and financial investors to bring in new capital”.
Shares of the New York-listed company slid nearly 5% to $0.99 in early Friday trading on the news.
Since March, Suntech has repeatedly announced temporary reprieves on its bond repayment as it works with bondholders to hammer out a broader restructuring deal that would give the company scope for recovery.
The shape of those negotiations currently envisages the entirety of the bonds being converted into equity shares, Suntech says.
Additionally, Suntech has agreed to allow its bondholders to nominate two more members to the board of directors to provide “guidance and assistance” in the restructuring effort.
Last week judicial authorities in Switzerland granted Suntech’s European subsidiary a six-month moratorium on creditor claims.
“We now have a clear path and focused work plan,” says chief executive David King. “We remain optimistic that a mutually acceptable consensual restructuring of the company is achievable.”