Wednesday, November 13, 2013

Do The Suntech Shuffle Step ($STP $STPFQ)

A correspondent writes in with a link to this press release from Suntech Japan [pdf] that appears to describe Suntech subsidiaries being shuffled from one part of the company to another. He comments,

"Looks like asset stripping of the highest order from the Bloomberg story that describes it.

Sounds like they are taking the Singapore subsidiary, which also held the Japanese sub (one of the hottest markets for solar at the moment) as well as Rietech, and giving it to Shunfeng as part of the deal. So these are assets directly owned by the Holdco being given to Shunfeng, to the ultimate benefit of the Wuxi creditors without any apparent compensation to the Holdco creditors.

Kuttler dropped off the org chart in the restructured version

They also have two American subs listed in the Guolian ownership…one is Suntech ES Holdings, the other looks like Suntech Arizona (doesn’t translate to that exactly), though if you look at the 'before' org chart (Suntech Arizona is in the left most column at the bottom) it looks like there was some kind of change to its status in March 2013 – look at the text in the parens.

I also suspect that the sub under the Wuxi Ind Dev Group is the P4 plant (the words in the box say 'Wuxi Suntech Power (China)' and notice the number 4 in the line of text underneath it. So they have stripped the hold cos ownership of that too.

Also, they still envision a NYSE listing for the holdco…the box under Guolian is 'Suntech Power Holdings (Cayman Islands) NY listed company'.

Corporate governance is right out the window. A de facto insolvent company, in default, donating assets from the holdco to a downstream sub without compensation. I don’t know what the Cayman laws say, but that could clearly be a transaction that would be clawed back or litigated in US BK court."
We are relying on a rough translation here. Can any reader contribute a good word for word translation? Corrections/comments are welcome.

It is absolutely astonishing that just shy of eight months after a corporate bond default everyone has to read about major restructuring moves from Japanese press releases. Even if any company could be trusted to restructure in secret, this one sure can't.

What are they going to say when this gets brought up in bankruptcy court?


Anonymous said...

This passage is from a Chinese story that was posted on the Yahoo board and seems to imply that there are quotas into Europe Suntech take advantage of. Maybe that is why Guolian is so interested in European assets.

"In the market , through the establishment of good sales network and optimize customer service system , for domestic and foreign customers ; reforming party 's own development while leveraging the advantages of power plants , the annual procurement can guarantee Suntech 1G W to 2G W components , plus EU 500M W about effective use of quotas , the U.S. market and the Japanese market annually approximately 200M W to 500M W 's sales , as well as domestic and other markets at least 200MW to 500M W 's sales , we can predict the components Suntech 2014 sales will reach 1.5GW or so , and with the continued expansion of the PV market grows, expected to return to a world -class clean energy industry enterprises."

This is the source on Yahoo:;_ylt=AtCfoMRfwzUmixadm0cYDQLeAohG;_ylu=X3oDMTB2N3F1dm02BHBvcwM0MARzZWMDTWVkaWFNc2dCb2FyZHNYSFJVbHQ-;_ylg=X3oDMTBhYWM1a2sxBGxhbmcDZW4tVVM-;_ylv=3?&bn=e4b68127-feba-3b9b-899f-ea1ba5eb0fe8&tid=1384282230281-f6703cce-2759-4a70-8c72-1e84295dc735&tls=la%2Cd%2C7%2C3

CP said...

I wonder what a quota allocation would be worth? Are they tradeable?

At a penny per watt you could be talking on the order of ~$10 million a year.

Could be a little bit of recovery on the bonds I suppose.

Why don't they just sell these quotas at a bankruptcy 363 sale so that there are competitive bids?

Why WOULDN'T a bondholder want to have competitive bids for the assets of the estate?

Anonymous said...

Suntech holdings is now balance sheet insolvent: it only holds GSF assets vs. $1.3 billion in liabilities!

The characters in brackets "()" represent countries and you can clearly see the following in the restructuring from the first chart to the three columns in the second chart:

1) Shunfeng takes over the subsidiaries of Wuxi STP (China) and Suntech Power Investments (Singapore).

2) Guolin invests in the Cayman shell, which owns: BVI shell, Cyprus shell, Swiss shell that holds: 2a) GSF (Luxembourg) companies that are underwater, 2b) Suntech US Delaware shell, and 2c) Suntech AZ plant (which was sold earlier this year but has not closed yet).

3) Wuxi now owns 100% of P4.

For the avoidance of doubt, Suntech holdings has no assets in China so the quota does not matter.

Jay & Trondheim should file compulsory liquidation petition in Cayman.

Anonymous said...

FYI: Cayman provisional liquidators claim it's BVI shell company still owns shares of Wuxi STP, Singapore subsidiaries, etc.

You can find the press release here:

The Wuxi court may not approve Wuxi Suntech's exit from bankruptcy, in which case, all of Suntech's operating assets would get liquidated next month.

Anonymous said...

Form 6K

Starting too look messy.

CP said...

On November 11, 2013, PricewaterhouseCoopers, the restructuring professionals appointed as a result of the grant of the Company’s application for a provisional liquidation by the Grand Court of the Cayman Islands, issued the following press release.




Hong Kong, 11 November, 2013 - On 7 November 2013, the Grand Court of the Cayman Islands appointed Mr David Walker and Mr Ian Stokoe of PricewaterhouseCoopers as joint provisional liquidators (the “JPLs”) of Suntech Power Holdings Co., Ltd (“Suntech Power”), a company incorporated in the Cayman Islands. The JPLs intend to work with the Suntech Power Board and its various stakeholders to attempt to restructure Suntech Power and its affiliated group companies (the “Group”).

We refer to Suntech Power’s Form 6-K Filing dated 19 July 2013 which disclosed certain transfers and disposals of the shares of Suntech Power Japan Corporation (“Suntech Japan”) and Suntech Power Investment Pte., Ltd. (“Suntech Singapore”) to Wuxi Suntech Power Co., Ltd (“Wuxi Suntech”) purportedly made in connection with intragroup debt restructuring (the “Purported Share Disposals”).

We hereby put all relevant parties on notice that the JPLs will investigate and pursue the Group’s rights to the fullest extent in respect of the Purported Share Disposals. Both Suntech Japan and Suntech Singapore were owned by Power Solar System Co., Ltd (“PSS”) and PSS is an immediate subsidiary of Suntech Power. PSS may be insolvent under the laws of the British Virgin Islands (“BVI”), the jurisdiction in which it is incorporated. As such, the Purported Share Disposals undertaken by PSS early this year may be voidable under BVI Law.

The JPLs are also aware of the Hong Kong Stock Exchange announcement made by Shunfeng Photovoltaic International Ltd on 1 November 2013 in relation to its proposed purchase of the entire equity interest of Wuxi Suntech by its subsidiary Jiangsu Shunfeng Photovoltaic Technology Co., Ltd. PSS is the 100% shareholder of Wuxi Suntech and any transfer or disposal of Wuxi Suntech’s shares requires the prior written agreement and consent of PSS. Suntech Power has instructed the directors of PSS that they are NOT authorised (in any way, whether directly or indirectly) to transfer or otherwise dispose of (in any way) any assets of PSS without the prior written approval of the JPLs. This includes any transfer or disposal of the shares of Wuxi Suntech. As of today’s date, the JPLs have not given their approval to any transfer or disposal of the shares of Wuxi Suntech to Jiangsu Shunfeng Photovoltaic Technology Co., Ltd or any other company or entity.

The JPLs reserve all the rights against any person or entity who may have participated in or facilitated (in any way) any transfers or disposals of the shares of Suntech Japan, Suntech Singapore and/or Wuxi Suntech referred to herein and any potential subsequent transfer of those shares, including the proposed purchase of the entire equity interest of Wuxi Suntech by Jiangsu Shunfeng Photovoltaic Technology Co., Ltd.”