By Charlie Zhu
HONG KONG, Dec 11 (Reuters) - China's Suntech Power HoldingsCo Ltd said its restructuring manager wouldinvestigate the planned sale of its main unit to ShunfengPhotovoltaic International Ltd for legal infractions -a move sources say could delay the $495 million deal.
Delays to the sale could in turn complicate therestructuring of Suntech, once's the world's biggest solar powermanufacturer but which has since been crushed by a glut of solarpanels as demand faltered after the global financial crisis.
After defaulting on a $541 million offshore convertiblebond, Suntech is now locked in battle with some of the bondholders who want to liquidate the company. It was delisted bythe New York Stock Exchange last month on concerns about itsability to file earnings reports.
PricewaterhouseCoopers, appointed in November to handle thecompany's financial restructuring and thwart the efforts ofthose bondholders, will look into whether the internal transferof Suntech's Japan and Singapore subsidiaries to its main unit,the now bankrupt Wuxi Suntech Power Co Ltd, had violated anylaws.
The restructuring managers of PWC may take necessary legalsteps to "remedy any improper actions which have caused loss" toSuntech Power Holdings and its creditors, a statement by Suntechsaid.
The Japan and Singapore subsidiaries were owned by aseparate unit of Suntech Power Holdings - Power Solar System CoLtd (PSS), which is registered in the British Virgin Islands.
Two sources familiar with the matter said the transfer mayhave been conducted without any formal approval of PSS. PSS hadbeen put into liquidation by PWC on Nov. 14, a day before thesale of Wuxi Suntech to Shunfeng was approved by a court in theeastern Chinese city of Wuxi, Suntech Power said on Wednesday.
Shunfeng has paid 500 million yuan as deposit on theacquisition of Wuxi Suntech and is due to pay the remaining 2.5billion yuan by this Friday.
Representatives for Suntech Power and Shunfeng declined tocomment. PWC could not be immediately reached for comment.
The transfer of the Japan and Singapore units - whose mainassets are sales channels in Japan and Australia plus a researchand development division - was largely dictated by a Chineseentity appointed by the Wuxi court to handle the restructuringof Wuxi Suntech's $1.7 billion in local debt, the sources said.
It was designed to make Wuxi Suntech more attractive tobidders, said the sources, who asked not to be identified asthey were not authorised to openly discuss the matter.
The transfer was also backed by the investment arm of theWuxi city government, Wuxi Guolian Development Co Ltd, which was bidding against Shunfeng for Wuxi Suntech,with an aim to restructure the whole of Suntech Power Holdings,the sources said.
Guolian lost the bid to Shunfeng, but has still expressedinterest in restructuring Suntech Power Holdings by injecting$150 million in cash and assets. It has also called for aswapping of some of Suntech Power Holdings' debt into equityalthough it has not specified how much.
Suntech, a former green tech poster child, had a marketcapitalisation of around $100 million before it was delisted,down from over $10 billion at its peak.
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