Wednesday, November 6, 2013

WSJ: "Suntech Reveals Reorganization Plans, Leaves One Bondholder Dubious" $STP

From an article this morning,

"Suntech, once the world's largest solar-panel maker, will 'move away' from manufacturing panels and become a seller and distributor of solar equipment, according to a court document reviewed by The Wall Street Journal. It will 'benefit from the supply of cheap solar panels currently available from competitors in the market,' said Chairman Michael Nacson in the filing, adding that Suntech would focus on its panel-installation service and could outsource production.

Though the company is 'cash-flow insolvent and may also be balance-sheet insolvent,' Mr. Nacson said, it believes that in time 'it will be possible to achieve a restructuring to return Suntech and its subsidiaries to solvency.'

He didn't reply to a request for comment.

Colin Peterson, managing director at distressed-debt hedge fund Trondheim Capital LLC, said he was skeptical that Suntech would be viable without manufacturing assets. Mr. Peterson holds about $1 million in Suntech bonds and is leading the charge to put the company into involuntary bankruptcy in the U.S.

'We will never rest until Suntech's finances and past transactions are properly investigated and an accounting is made to creditors for any deficiency,'
Mr. Peterson said."


Anonymous said...

How much time did the application for a provisional liquidation buy STP?

Scratching my head looking at the price of STP here.

Anonymous said...

Someone is "painting the tape" - look at the eerie flatline of the share price at 1.25.

Anonymous said...

As part of its reorganization, Suntech said U.S. bondholders will get a "substantial minority share interest" in the company in exchange for debt.

If the new capital injection is $150M, the above can be true only if the bondholders agree to lower their $540M claim.

Anonymous said...

The sole purpose of this Cayman proceeding is to try to prevent a U.S. court (or trustee, or anyone impartial) from reviewing Suntech's finances and going after management or third parties for any malfeasance that is discovered.

Anonymous said...

In my comment above I didn't take into account the other assets that will be also contributed. So it makes sense without bondholders lowering their claim.

Anonymous said...

As of this writing, quite a few shares on the bid.

~230k @ 1.25
~277k @ 1.18
~503k @ 1.14 (only 4 orders)
~185k @ 1.00