| HONG KONG
HONG KONG Dec 11 China's Suntech Power Holdings
Co Ltd said its restructuring manager would
investigate the planned sale of its main unit to Shunfeng
Photovoltaic International Ltd for legal infractions -
a move sources say could delay the $495 million deal.
Delays to the sale could in turn complicate the
restructuring of Suntech, once's the world's biggest solar power
manufacturer but which has since been crushed by a glut of solar
panels as demand faltered after the global financial crisis.
After defaulting on a $541 million offshore convertible
bond, Suntech is now locked in battle with some of the bond
holders who want to liquidate the company. It was delisted by
the New York Stock Exchange last month on concerns about its
ability to file earnings reports.
PricewaterhouseCoopers, appointed in November to handle the
company's financial restructuring and thwart the efforts of
those bondholders, will look into whether the internal transfer
of Suntech's Japan and Singapore subsidiaries to its main unit,
the now bankrupt Wuxi Suntech Power Co Ltd, had violated any
The restructuring managers of PWC may take necessary legal
steps to "remedy any improper actions which have caused loss" to
Suntech Power Holdings and its creditors, a statement by Suntech
The Japan and Singapore subsidiaries were owned by a
separate unit of Suntech Power Holdings - Power Solar System Co
Ltd (PSS), which is registered in the British Virgin Islands.
Two sources familiar with the matter said the transfer may
have been conducted without any formal approval of PSS. PSS had
been put into liquidation by PWC on Nov. 14, a day before the
sale of Wuxi Suntech to Shunfeng was approved by a court in the
eastern Chinese city of Wuxi, Suntech Power said on Wednesday.
Shunfeng has paid 500 million yuan as deposit on the
acquisition of Wuxi Suntech and is due to pay the remaining 2.5
billion yuan by this Friday.
Representatives for Suntech Power and Shunfeng declined to
comment. PWC could not be immediately reached for comment.
The transfer of the Japan and Singapore units - whose main
assets are sales channels in Japan and Australia plus a research
and development division - was largely dictated by a Chinese
entity appointed by the Wuxi court to handle the restructuring
of Wuxi Suntech's $1.7 billion in local debt, the sources said.
It was designed to make Wuxi Suntech more attractive to
bidders, said the sources, who asked not to be identified as
they were not authorised to openly discuss the matter.
The transfer was also backed by the investment arm of the
Wuxi city government, Wuxi Guolian Development Co Ltd
, which was bidding against Shunfeng for Wuxi Suntech,
with an aim to restructure the whole of Suntech Power Holdings,
the sources said.
Guolian lost the bid to Shunfeng, but has still expressed
interest in restructuring Suntech Power Holdings by injecting
$150 million in cash and assets. It has also called for a
swapping of some of Suntech Power Holdings' debt into equity
although it has not specified how much.
Suntech, a former green tech poster child, had a market
capitalisation of around $100 million before it was delisted,
down from over $10 billion at its peak.