Debt-ridden solar manufacturer Suntech has announced its intention to challenge the petition for involuntary bankruptcy brought against it by investors.
The company claims that the four bondholders behind the petition represent just US$1.6 million of its outstanding notes.
“The petition was brought by a group of four asserted bondholders holding in aggregate approximately US$1.6 million of the company's 3% convertible senior notes due 2013, representing less than 0.3% of the total aggregate principal amount of approximately $541 million of notes outstanding,” read a company statement.
A judge ruled in favour of the petition for Chapter 7 bankruptcy on 20 September.
The company has been looking for buyers with Shunfeng Photovoltaic Technology selected as the preferred bidder. Shares in Shunfeng were suspended on 24 October and the deal looked imminent.
On 30 October the situation became more complicated when Suntech announced the rejected bidder had offered US$150 million of investment. Wuxi Guolian Development, controlled by the local Wuxi government, also said it would make its existing power generation and energy companies available for mergers and joint venture as appropriate.
It is unclear whether this investment would be dependent on Suntech rejecting Shunfeng’s overtures.
The offer could have emboldened Suntech and strengthened its hand in contesting the petition.
Suntech is one of the key employers in Wuxi.