Feb 3, 2014 - Chinese group Suntech Power Holdings Co Ltd (NYSE:STP) said Friday it had struck a restructuring support agreement with some of its bondholders that demanded the photovoltaics (PV) maker to enter involuntary bankruptcy under Chapter 7.
Under the terms of the agreement, which was also signed by Suntech’s provisional liquidators and some supporting holders of its 3% senior bonds, the chapter 7 proceedings in the US have been frozen and the proceedings will be dismissed. This action can be undertaken only after the recognition of the provisional liquidation for which Suntech applied in November 2013 in the Cayman islands, seeking Chapter 15 protection in the US.
The liquidators will on behalf of the company file the Chapter 15 petition by February 21. Should Suntech fail to file for Chapter 15 by the set date, the agreement may be cancelled. In addition, it might be also terminated if the US Bankruptcy Court does not recognise the Cayman Islands restructuring proceeding by May 31 or if the restructuring is not approved by December 31, 2014.
In mid-March 2013, Suntech failed to make the principal payment on a USD-541-million (EUR 401m) bond, touted as the first bond default for a China-based company. The petition demanding that the company enter Chapter 7 proceedings was filed in the middle of October with the US Bankruptcy Court in the Southern District of New York by Trondheim Capital Partners LP, Michael Meixler and Longbell Holdings LLC. Together, these bondholders hold some USD 1.6 million of Suntech’s 3% senior convertible noted that matured in 2013, the company calculates.
(USD 1.0 = EUR 0.741)
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