Monday, March 18, 2013

" Suntech Announces Default with Respect to Its 3% Convertible Notes" ($STP)

Suntech Power Holdings Co., Ltd. (NYSE: STP) ("Suntech" or the "Company") today announced that it has received from the trustee of its 3% Convertible Notes (the "Notes") a notice of default and acceleration relating to Suntech's non-payment of the principal amount of US$541 million that was due to holders of the Notes on March 15, 2013. Such event of default has also triggered cross-defaults under Suntech's other outstanding debt, including its loans from International Finance Corporation and Chinese domestic lenders.

As previously announced, Suntech has entered into a forbearance agreement with holders of over 60% of the Notes, one of the terms of which is that the forbearing Note holders will cooperate with Suntech in addressing certain legal proceedings that may be initiated against it. Suntech understands that those Note holders have also requested the trustee under the Notes not to take any further action as consensual restructuring discussions continue. Suntech is thus far unaware of any legal proceedings initiated by any Note holders against the Company. Suntech intends to continue to engage with holders of the Notes and other lenders with a view to achieving a consensual restructuring.

Suntech is also continuing its efforts to restructure and increase the cost-efficiency of its operations, maintain business relationships with its existing customers and suppliers, and seek additional sources of capital to meet its ongoing operational requirements and debt repayment obligations. In addition, Suntech is in discussions with certain of its suppliers and lenders relating to various other claims for non-payment or non-performance, which the Company hopes to resolve in a timely manner.

David King, Suntech's CEO, stated, "It is currently a very difficult time for our company and our industry, but the management and board of Suntech are committed to finding a way forward that will take into account the rights and interests of all of its constituents, including shareholders, noteholders, lenders, customers, suppliers and employees. We are currently exploring strategic alternatives with lenders and potential investors, which could help to set us on a path towards longer term success. We appreciate the support and understanding of our various stakeholders as we undertake efforts to implement these measures."

9 comments:

Joe Nelson said...

No Tom Petty?

b6ec54f8-8a0a-11e2-99bc-000bcdcb8a73 said...

FYI keep your nose to the grindstone for $STP PRC bankruptcy plan to be released on Wednesday: http://www.greentechmedia.com/articles/read/Suntech-Update-Wuxi-Board-Member-Jiangsu-Approves-Bankruptcy

CP said...

It's a little after noon in Wuxi. Seems like nothing happening today?

b6ec54f8-8a0a-11e2-99bc-000bcdcb8a73 said...

It was reported in Chinese and now is being reported by Bloomberg, WSJ, etc:

http://www.bloomberg.com/news/2013-03-20/suntech-says-chinese-banks-seek-insolvency-for-main-unit.html

http://online.wsj.com/article/SB10001424127887324557804578372082733827860.html

C.R.L. said...

Stock still halted???

C.R.L. said...

Does anyone know when the stock is going to reopen? Looks like it did not trade at all today? I have some put options I need to close out.....

Jason said...

C.R.L,

Not sure when it will trade again, but it is currently a T1 halt, which means "Trading is halted pending the release of material news." They might wait until the courts make a decision to issue press release.

You can read more about the different codes here:
http://www.nasdaqtrader.com/Trader.aspx?id=tradehaltcodes

To track STP status go here:
http://www.nasdaqtrader.com/Trader.aspx?id=Tradehalts

C.R.L. said...

Thanks Jason!

Jason said...

On the STP bond page its lists settlement date as March 25th and 26th for recent bond purchases...can anyone explain what this means? Was there a settlement on the bonds?

http://cxa.gtm.idmanagedsolutions.com/finra/bondcenter/BondTradeActivitySearchResult.aspx?StartDate=03/20/2013&EndDate=03/21/2013&SelectionOption=2&TradeSize=&SortBy=0&ID=ODY4MDBDQUU0