| WUXI, China/HONG KONG
WUXI, China/HONG KONG May 22 Local creditors of
Wuxi Suntech, the bankrupt unit of Chinese solar panel maker
Suntech Power Holdings Co Ltd, on Wednesday claimed the
subsidiary owed them a combined $2.5 billion, at the start of a
debt restructuring process expected to last months.
Wuxi Suntech, the biggest subsidiary of New York-listed
Suntech Power, filed for bankruptcy protection in China
in March, five days after its troubled parent company defaulted
on a $541 million dollar convertible bond.
The restructuring of Suntech's domestic debts is being
closely watched by its overseas creditors, whom analysts say are
expected to take a "haircut" - or suffer losses. Last week
Suntech Power said it reached an agreement with some foreign
creditors to further defer its obligations on the bond.
The claims for the domestic debts of 15.6 billion yuan ($2.5
billion) came from more than 500 creditors, including banks and
some of Wuxi Suntech's suppliers, but most of the claims have
yet to be reviewed and verified by its court-appointed debt
administrator, creditor representatives told Reuters.
The court held the first meeting of Wuxi Suntech's creditors
in the eastern Chinese city of Wuxi - where Suntech Power is
headquartered - on Wednesday to brief creditors on the debt
restructuring and the debt administrator vowed to protect
"We will complete the drafting of the restructuring plan and
choose a strategic investor as soon as possible," Yang Erguan, a
spokesman for the debt administrator, said in a statement issued
after the creditor meeting attended by 460 representatives.
So far, the administrator has confirmed debt claims
amounting to a total of 3.3 billion yuan from 300 creditors,
Yang said, adding that it hoped to complete all debt
registration and verification by the end of June.
Suntech Power and others in the solar industry have been
grappling with a global glut of solar panels that has sent
prices into a tailspin and hammered their once high-flying
stocks over the past two years.
At the end of March 2012, Suntech Power had total debt of
$2.2 billion - including loans from China Development Bank, and
a $50 million convertible loan from the International Finance
Corporation, the private sector arm of the World Bank.
The Wuxi government is trying to maintain Suntech's
production capacity - and the thousands of local jobs it
supports. A March 21 Suntech statement said "the primary goal"
of the court-appointed administrators of the company "is to
restructure Wuxi Suntech's debt obligations while continuing
production and operations".
Wuxi Suntech has seen a gradual improvement in its business
as the debt administrator has been pushing to recover accounts
receivable and offload inventories, the statement said.
Both Washington and Brussels accuse Chinese solar panel
makers of selling panels below cost. The United States last year
slapped anti-dumping duties on solar cells imported from China.
The European Commission said on May 8 it would take similar
action. Europe accounts for half of the global demand for solar