Suntech reaches deal to again delay debt payment
Suntech reaches agreement with lenders to delay $541M debt payment for a second time
NEW YORK (AP) -- Suntech Power Holdings Co., one of the world's biggest solar panel manufacturers, said Wednesday that it reached a deal with some of its lenders to again delay the repayment of $541 million in debt.
The news sent U.S. shares of the Chinese company up 8 percent in morning trading.
In March, Suntech defaulted on a $541 million bond payment. The company ran short of cash after taking heavy losses last year. Suntech said at that time that it reached deal with holders of most of the bonds to postpone payment, but the trustee of the bonds declared a default.
On Wednesday, the company said it reached a deal with most of the bondholders to again delay the payment again until June 28.
Suntech CEO David King said the new deal shows bondholders' continued support for Suntech and will allow the company to continue to negotiate with its creditors in hopes of restructuring its debt.
Solar panel makers have suffered huge losses over the past year after rapidly growing production capacity outstripped demand and prices plunged.
Suntech, headquartered in the eastern city of Wuxi, west of Shanghai, also has been hurt by a revelation last summer that a business partner faked $680 million in collateral for a loan Suntech had guaranteed.
In morning trading, Suntech's U.S. shares rose 4 cents, or 8 percent, to 63 cents.
