The RMB3 billion (US$492 million) bid from Shunfeng Photovoltaic International for Suntech’s manufacturing arm has been accepted by the administrator of the flailing firm.
Shunfeng announced that the balance of the bid would be paid once a court in Wuxi has approved the restructuring but warned this may not be straight forward. A deposit of RMB500 million (US$82 million) has already been paid.
“The approval of Wuxi Suntech Restructuring Plan further strengthens our upstream and midstream capabilities in fulfilling our massive demand in construction of our downstream solar power generation plants,” said Zhang Yi, chairman of Shunfeng Photovoltaic International Limited.
“With the trust gained from the equity interest holder and creditors, we are confident to become a leading player in the solar power market in China and in the world, as well as aiming to become a leading integrated clean energy enterprise,” he added.
Suntech Wuxi had been eyed by Shunfeng and a local government development investor, Wuxi Guolian Development, which has since offered an US$150 million cash injection. Local politicians are keen to protect Suntech’s Wuxi factories, which are a large employer in the region.
Last week Suntech Wuxi’s parent Suntech Power Holdings applied for voluntary liquidation in the Cayman Islands. Suntech Wuxi has estimated debts of US$2.3 billion.
Withdrawing from the Cayman Islands is likely to make it more difficult for international creditors to retrieve monies owed.
It is also fighting forced bankruptcy proceedings in the US courts brought against it by a group of bondholders and is de-listing from the New York Stock Exchange. It is looking to instead apply for voluntary Chapter 15 liquidation that would protect it from creditors in the US.
A more cautious statement released by Shunfeng to the Hong Kong Stock Exchange warned that there could be those opposed to the deal. It said that it had “noticed from public information” that an application for voluntary liquidation had been lodged in the Cayman Islands.
“The company cannot guarantee that no interested parties may take steps to object to the Restructuring Plan, including the making of an application to the Wuxi Intermediate People’s Court to object to the approval of the Restructuring Plan,” read the statement for investors.
Update: Shares in Suntech Power Japan are to be transferred to Suntech Wuxi as part of the restructuring process at the company, according to Bloomberg.