Shunfeng makes full USD-494m payment for Wuxi Suntech

Dec 19, 2013 - China-based Shunfeng Photovoltaic International Ltd (HKG:1165) today said it had now paid in full the CNY-3-billion (USD 494m/EUR 362m) consideration for its previously agreed buy of Wuxi Suntech Power Holdings.

The buyer earlier paid CNY 500 million as a deposit, while today its largest shareholder Cheng Kin Ming transferred the balance of CNY 2.5 billion to Wuxi Suntech’s administrator. The acquisition has not yet been completed as there are certain conditions to be met.

The target company is the main unit in China of troubled photovoltaic (PV) products maker Suntech Power Holdings Co Ltd (NYSE:STP). In mid-March, Suntech Power failed to make the principal payment on a USD-541-million bond (EUR 396m), marking the first bond default for a China-based company. A few days later, Wuxi Suntech entered insolvency proceedings and restructuring.

On November 29 Shunfeng said it had agreed to sell HKD 3.58 billion of convertible bonds to finance the acquisition of Wuxi Suntech Power Holdings. The CNY-3-billion deal was agreed on October 24 and received the thumbs-up by the Wuxi Intermediate People’s Court in the middle of November.

Meanwhile, Suntech Power filed for provisional liquidation with the Grand Court of the Cayman Islands. On November 9 the firm’s application was accepted and PricewaterhouseCoopers restructuring professionals were tasked with helping the managing board “continue progressing a restructuring of the company.” PricewaterhouseCoopers representatives later notified Shunfeng that they had not given their consent to “any transfer or disposal of the equity interests of Wuxi Suntech to the Jiangsu Shunfeng or any other company or entity.”

On December 11 Suntech Power said its restructuring manager was to investigate the sale of Wuxi Suntech. Shunfeng has not made any comment on that, while reports say the probe might delay the planned acquisition.

(CNY 10 = USD 1.647/EUR 1.206)

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