Suntech Power Holdings Co. Ltd. says it has received from the trustee of its 3% convertible notes a notice of default and acceleration relating to Suntech's non-payment of the principal amount of $541 million that was due March 15.
The default has also triggered cross-defaults under Suntech's other outstanding debt, including its loans from International Finance Corp. and Chinese domestic lenders.As previously announced, Suntech has entered into a forbearance agreement with holders of over 60% of its notes. One of the terms of the agreement 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 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.
‘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, note holders, lenders, customers, suppliers and employees,’ says David King, CEO of Suntech.
‘We are currently exploring strategic alternatives with lenders and potential investors, which could help to set us on a path towards longer term success,’ he adds.