Suntech Power Holdings has struck a temporary deal with note holders on its US$541 million of bonds due on March 15 by delaying payment a further two months while more talks are undertaken.
The company said that a forbearance agreement had been signed with over 60% of the bond holders to push out the convertible note until May 15 2013.
David King, Suntech’s CEO, said: “The forbearance agreement demonstrates bondholders’ support for Suntech and provides an excellent platform to further discussions towards a mutually agreeable restructuring of the notes. We are making progress and are working to find a resolution soon. At the same time, we are continuing our cost and operational review to further improve our efficiency.”
However, speculation continues to mount over whether the company can maintain support from its banks to reach a deal on providing further liquidity in light of the convertible note due.
Rumours are also circulating that elements of the company could file for bankruptcy and be supported in restructuring by local government in China.
The company is also facing a challenge by former Chairman Zhengrong Shi who claims his removal from the role is unlawful.