Suntech Power Holdings default on paying back its US$541 million convertible note last week has triggered cross-defaults on other loans, according to the company.

Suntech also said in a statement, confirming its US$541 million convertible note default, that some of its suppliers and lenders have started claims for non-payment or non-performance.

Based on typical financial clauses, any default on a convertible note means that other notes holders can also claim early return of loans, though typically filing legal cases to recoup loans can not be instigated for 90 days after the first default date.

This means Suntech's other outstanding debts with the International Finance Corporation and Chinese domestic lenders are affected, although the company said in a statement that it was thus far “unaware of any legal proceedings” initiated by any other bond holders.

The company reiterated its forbearance agreement with 63% of bondholders but added that those holders would also cooperate with Suntech “in addressing certain legal proceedings that may be initiated against it”.

However, the first bond in default only requires 25% of the value to be held by other parties not signature to the forbearance agreement to start legal proceedings after the 90-day statutory waiting period.

Claims for payment by suppliers are a different matter, yet the confirmation that certain unidentified suppliers have not been paid in accordance with supply contracts highlights Suntech’s precarious cash position ahead of potential involuntary bankruptcy proceedings bondholders can initiate in the next two months.

David King, Suntech's CEO, said: "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 these measures."

It was not made clear by the company who the “potential investors” may be. Speculation has been rife that the local government could bail out Suntech, yet despite claims a deal had already been done, this has not yet been confirmed.