It is stated under Chapter 7 of the bankruptcy law that a trustee has the right to oversee the sale of a company’s assets to raise money to repay its creditors.
In March Suntech (NYSE: STP) has defaulted on a principal payment on its $541 million convertible bonds prompting its main manufacturing unit, Wto uxi Suntech, to file for bankruptcy protection in China five days later.
Suntech, once the largest panel maker in the world, has not been able to recover after a global glut of panels depressed selling prices and the withdrawal of subsidies in top European solarmarkets. Its stock price has collapsed since touching a life-high of $86.28 in December 2007.
One of the four U.S. bondholders is Trondheim Capital Partners LP. Colin Peterson, a managing director at the distressed-debt firm, told Reuters in March that he would sue Suntech if it failed to make the payments.
Suntech (NYSE: STP) is set for a $150 million local government bailout, this is a step in order to tackle its $2.3 billion debt pile that is as peculiar with Beijing’s attempt to wean the sector off state support.
The support comes from the municipal government of Wuxi, an eastern city where Suntech’s Chinese subsidiary is headquartered, and follows Shunfeng Photovoltaic International Ltd’s signing of a preliminary deal to buy its bankrupt Chinese unit.
Again and again, local governments have used taxpayer money and influence over local banks to avert domestic bond defaults and keep necrotic businesses breathing. The country has never experienced a formal domestic bond default.
In a statement on its website, Suntech said it had received a letter of intent from Wuxi Guolian Development Co Ltd , the investment arm of the city government, saying it would invest $150 million to support restructuring.
CCTV’s Zhang Tao reports on the local government and the company are working together to save the once huge company. Suntech (NYSE:STP) will shut down its only U.S. pla…