Suntech Announces Default with Respect to Its 3% Convertible Notes
Note Holder Support for Consensual Restructuring Continues
WUXI, China, March 18, 2013
WUXI, China, March 18, 2013 /PRNewswire/-- Suntech Power Holdings Co., Ltd.
(NYSE: STP) ("Suntech" or the "Company") today announced that it has received
from the trustee of its 3% Convertible Notes (the "Notes") a notice of default
and acceleration relating to Suntech's non-payment of the principal amount of
US$541 million that was due to holders of the Notes on March 15, 2013. Such
event of default has also triggered cross-defaults under Suntech's other
outstanding debt, including its loans from International Finance Corporation
and Chinese domestic lenders.
As previously announced, Suntech has entered into a forbearance agreement with
holders of over 60% of the Notes, one of the terms of which 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 under the Notes 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.
Suntech is also continuing its efforts to restructure and increase the
cost-efficiency of its operations, maintain business relationships with its
existing customers and suppliers, and seek additional sources of capital to
meet its ongoing operational requirements and debt repayment obligations.In
addition, Suntech is in discussions with certain of its suppliers and lenders
relating to various other claims for non-payment or non-performance, which the
Company hopes to resolve in a timely manner.
David King, Suntech's CEO, stated, "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, noteholders,
lenders, customers, suppliers and employees.We are currently exploring
strategic alternatives with lenders and potential investors, which could help
to set us on a path towards longer term success.We appreciate the support and
understanding of our various stakeholders as we undertake efforts to implement
Suntech Power Holdings Co., Ltd. (NYSE: STP) produces solar products for
residential, commercial, industrial, and utility applications. With regional
headquarters in China, Switzerland, and the United States, and gigawatt-scale
manufacturing worldwide, Suntech has delivered more than 25,000,000
photovoltaic panels to over a thousand customers in more than 80 countries.
Suntech's pioneering R&D creates customer-centric innovations that are
designed to drive solar to grid parity against fossil fuels. Suntech's mission
is to provide everyone with reliable access to nature's cleanest and most
abundant energy source.
Safe Harbor Statement
This press release contains forward-looking statements. These statements
constitute "forward-looking" statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, and as defined in the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking statements can
be identified by terminology such as "will," "expects," "anticipates,"
"future," "intends," "plans," "believes," "estimates" and similar statements,
and include statements about the prospects of the solar industry and the
Company's ability to successfully resolve its liquidity issues, achieve a
consensual restructuring of the 3% Convertible Notes and return to
profitability. Further information regarding these and other risks is included
in Suntech's filings with the U.S. Securities and Exchange Commission,
including its annual report on Form 20-F. Suntech does not undertake any
obligation to update any forward-looking statement as a result of new
information, future events or otherwise, except as required under applicable
SOURCE Suntech Power Holdings Co., Ltd.
Contact: Shashin Surti, Weber Shandwick for Suntech, +86 21 2411 0046, or
Press spacebar to pause and continue. Press esc to stop.