Suntech Power Holdings Co. Ltd. has reached an accord with a majority of those holding its 3% convertible notes for a forbearance agreement. Suntech says the new agreement, which expires Aug. 30, sets forth the next steps in the company's debt restructuring process and provides time for it to implement a restructuring plan.
Suntech says the new agreement could lead to the equitization of all major debt claims held by the bondholders. In addition, the bondholders will nominate two additional members to Suntech's board of directors to provide guidance and assist in ongoing restructuring efforts.
‘Through the efforts made by the bondholders and the company in the past months, we now have a clear path and focused work plan,’ says Suntech CEO David King. ‘We remain optimistic that a mutually acceptable consensual restructuring of the company is achievable.’
Suntech defaulted on its 3% convertible notes in March and subsequently filed for insolvency. In June, Suntech's European subsidiary was granted a six-month definitive moratorium on creditor claims by a Swiss court.