Suntech seeks liquidation in Cayman Islands, may file Chapter 15 case

By Caroline Salls

Pittsburgh, Nov. 6 - Suntech Power Holdings Co., Ltd. applied for provisional liquidation with the Grand Court of the Cayman Islands, according to a company news release.

If the court grants the liquidation application, restructuring professionals selected by Suntech will be appointed to work with the company's board of directors to continue progressing a restructuring.

By launching a proceeding in the Cayman Islands, the company said it will have the benefit of protection and additional time to complete negotiations and conclude the restructuring in the best interests of all stakeholders.

Suntech said it will consider a Chapter 15 bankruptcy filing following the grant of the application in the Cayman Islands to obtain similar protections in the United States.

According to the release, the company has reached an understanding with its creditor working group, which includes implementing a recapitalization plan through a scheme of arrangement.

The principal components of the restructuring scheme would include the exchange of outstanding debt into Suntech equity and the introduction of a new strategic investor that will provide funding to complete the restructuring process.

An involuntary Chapter 7 bankruptcy case was filed against Suntech, a Wuxi, China-based manufacturer and distributor of solar panels, on Oct. 14 in the U.S. Bankruptcy Court for the Southern District of New York. The Chapter 7 case number is 13-13350.

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