Suntech Defaults on Bond Payment
As expected, Suntech Power Holdings Co. Ltd. (NYSE: STP) failed to make a required $541 million bond repayment scheduled for last Friday. The company claimed last week to have reached forbearance agreements with about 60% of its foreign bondholders, who agreed to give the struggling solar panel maker an additional two months to either pay or renegotiate.
The failure to make Friday's payment is a default and a bankruptcy filing is a distinct possibility. Bondholders who did not agree to any forbearance are reported to be demanding that the trustee file an involuntary bankruptcy notice. If such a filing should occur, the bankruptcy could be either a Chapter 7 liquidation or a Chapter 11 reorganization. The trustee for the bonds is Wilmington Trust Co. of Wilmington, Delaware.
Suntech is the second-largest Chinese company as measured by revenue listed on U.S. exchanges, and a bankruptcy filing either by or on behalf of Suntech would be the highest visibility bankruptcy by a Chinese firm in many years.
Filed under: 24/7 Wall St. Wire, Alternative Energy, Bankruptcy, Bonds, China, Green Biz Tagged: STP