A Wuxi court has approved Shunfeng Photovoltiac International’s purchase of Suntech Power’s manufacturing arm, taking the protracted saga closer to conclusion.
Suntech Wuxi’s factories will increase their output with all outstanding wages and taxes to be paid in full, according to a document released to the Hong Kong stock exchange. Ongoing contractual obligations will be fulfilled.
Shunfeng has already intimated that it would resume production lines that have previously been closed. An additional 1GW of module production could resume and a 1.6GW cell production line, closed since August 2012, could be brought up to a levele of 1.2GW after the acquisition is settled.
Another cell production factory could remain closed with Shunfeng referring to facilities at the plant as “obsolete”.
Under the terms of the deal, Shunfeng will also pay all the administrator’s costs and repay some of the US$1.75 billion debts owed to Chinese creditors.
Chinese creditors owed less than RMB100,000 (US$16,400) will be paid in full by Shunfeng. Chinese debts above that value will be paid around 30% of what they are due.
It is unclear whether the near US$500 million debts owed to foreign investors will be paid.
Suntech recently applied to liquidate its Cayman Islands registered company and is considering applying for voluntary bankruptcy in the US. Both moves could make it more difficult for creditors outside of China to recoup the money.
Shunfeng had previously agreed a price of RMB3 billion (US$492 million) with a deposit of RMB500 million (US$82 million) already paid. The company has until 15 December to pay the balance of the price.
The company has also pledged to invest a further RMB3 billion in to upgrade facilities and provide working capital.
Suntech has confirmed to PV Tech that the local government's offer of US$150 million of investment into Suntech's parent company still stands, despite its failed bid for Suntech Wuxi.
A further question mark hanging over the deal is whether it will be subject to any legal challenge. Last week the Cayman Islands liquidators working on behalf of Suntech Power Holdings questioned whether the Shunfeng deal could go ahead without the approval of Power Solar Systems, a subsidiary of Suntech Power Holdings that they claimed still legall owned Wuxi Suntech.