Suntech Power Holdings officially said for the first time that it would not pay holders of its US$541 million convertible bonds due today.
The company made the statement in response to a New York Stock Exchange request to explain the unusual trading activity of Suntech’s stocks, which at one point were down 24% yesterday but ended the trading day down 19% and below the US$1.00 level.
Suntech said in a brief statement that it continued to engage with over 60% of bond holders, having claimed to have negotiated a two-month stay on repayment to restructure the deal.
However, numerous reports have since highlighted that remaining bond holders had claimed not to have been contacted by Suntech and expected to be paid today, or start legal proceedings to force the company into involuntary bankruptcy.
Reports in China continue to support rumours that Suntech’s multiple subsidiaries, notably in Wuxi would be taken over by the local government via selective bankruptcies. Suntech has not confirmed or denied such reports.