Suntech Singapore fails to repay $263.9 million debt; assets preserved

By Caroline Salls

Pittsburgh, March 18 - Suntech Power Holdings Co., Ltd. said Suntech Power Investment Pte., Ltd. (Suntech Singapore) filed an application to set aside a High Court of the Republic of Singapore ordering it to pay $263.9 million to Suntech Power Holdings subsidiary Power Solar System Co., Ltd. (PSS).

According to a news release, Suntech Singapore was required to repay the judgment debt by March 13, but failed to do so. Suntech Singapore is now deemed to be unable to pay its debts under the Singapore Companies Act.

PSS also filed a civil complaint with the Shanghai No.1 Intermediate People's Court against Suntech Singapore for an outstanding principal amount of $11 million and overdue interest.

In conjunction with the civil complaint, PSS applied for a preservation order related to onshore assets held by Suntech Singapore, particularly an equity interest in Suntech Power Co. Ltd. (Suntech Shanghai).

The company said the preservation application was granted on March 4. The initial preservation period will be one year, subject to extension by PSS.

A hearing on the civil complaint is scheduled for Nov. 5, 2014.

"We will rigorously defend the application by Suntech Singapore to set aside PSS' judgment for the sum of $263.9 million, and will take all necessary steps to recover value for creditors," PSS liquidator John Ayres said in the release.

"We are also making substantial progress in the investigation of the purported transfer of the equity interests in Suntech Power Japan Corporation and Suntech Singapore to Wuxi Suntech Power Co., Ltd.

"These actions appear to have been taken without proper regard for the interests of creditors and shareholders of the company and appropriate actions will be taken in due course."

Suntech Power Holdings joint provisional liquidator David Walker said in the release, "Suntech Shanghai is a valuable core subsidiary of Suntech Singapore, and in obtaining the asset preservation order in the [People's Republic of China] we have hopefully prevented the asset from being placed beyond reach."

Suntech is a Wuxi, China-based manufacturer and distributor of solar panels. Its liquidators filed a Chapter 15 bankruptcy case on Feb. 21 in the U.S. Bankruptcy Court for the Southern District of New York under case number 14-10383.

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