Suntech Power Holdings Corp (尚德電力), the Chinese solar-panel maker that defaulted on US$541 million of bonds, filed for bankruptcy court protection from US creditors as it liquidates in the Cayman Islands.
The company filed its Chapter 15 petition late on Friday in a US Bankruptcy Court in Manhattan as part of a restructuring agreement with petitioners seeking an involuntary filing last year. In November last year, Suntech told the court that the proposed action by US creditors could derail restructuring efforts.
“The Chapter 15 petition is a very important step to conclude a successful restructuring of the company as it would allow a centralized process to assert and resolve claims,” said David Walker, a joint provisional liquidator, in a statement on Saturday. “Chapter 15 recognition will stay actions brought by creditors in the US and help ensure that all creditors are treated equally.”
Wuxi, China-based Suntech, the world’s biggest solar-panel maker in 2011, is incorporated in the Cayman Islands and has no operations or significant assets in New York, according to the company. It had US$541 million of senior notes outstanding and a US$50 million convertible loan, according to court papers.
The company’s main unit was pulled into bankruptcy proceedings by Chinese banks after it missed a bond payment in March last year. Shunfeng Photovoltaic International Ltd agreed to buy the unit for 3 billion yuan (US$492 million).
Trondheim Capital Partners LP, Michael Meixler and Longball Holdings LLC filed the involuntary petition under Chapter 7 of the US Bankruptcy Code in New York on Oct. 14 last year. They said they held US$578,230.68 in claims against the company.
The creditors seeking the US bankruptcy are a “tiny minority,” holding only 0.27 percent of the outstanding debt, Suntech said in papers filed on Nov. 6 last year seeking to have the case dismissed.
The action could “derail the substantial progress Suntech has made in reaching a consensual restructuring with a wide array of its stakeholders, including a substantial percentage of its funded debt creditors,” the company said at the time.