Suntech Power Holdings Co., once the world’s largest solar-panel maker, “does not plan” to make a principal payment on $541 million in convertible bonds due tomorrow.
Suntech “plans to continue to work with holders of the notes” on restructuring the terms of the debt, the Wuxi, China-based company said in a statement today. The solar producer said March 11 that about 60 percent of bondholders had agreed to wait until May 15 before exercising their rights. Other bondholders said the company never contacted them about the arrangement.
This is the first time the company has definitively said it won’t make the payment as scheduled and it will probably default, according to Aaron Chew, a Maxim analyst based in New York.
“There probably are going to be minority bond holders pushing back tomorrow, potentially filing for default,” Chew said in an interview today.
Suntech “is not aware of any pending or planned actions or claims in relation to such non-payment,” it said in the statement.
Suntech was the biggest panel-maker by shipments in 2011 and has had two years of losses after prices plunged industrywide. It’s been seeking to renegotiate the debt.