Suntech says Europe business gets credit extension

Suntech's Europe unit gets extension to restructure debt with creditors

Associated Press

NEW YORK (AP) -- Suntech Power Holdings Co. said Wednesday that its European division will stay in business while it tries to restructure its debt with creditors.

Suntech said it had to apply for a provisional moratorium on claims by creditors because of its high levels of debt. A Swiss court granted the company a two-month moratorium on claims by creditors. The company, based in China, said most of its debt is inter-company.

A court-appointed administrator will assess the finances of Suntech Power International and the prospects for the company to restructure its debt. Suntech said the business will continue to operate during that time.

Suntech said it is not aware of any similar proceedings except for restructuring its Chinese business.

U.S. shares of Suntech rose 10 cents, or 15.4 percent, to 72 cents in morning trading.

Suntech is one of the world's biggest solar panel manufacturers. In March the company defaulted on a $541 million bond payment. The company ran short of cash after taking heavy losses last year. Suntech said it reached agreements with holders of most of the bonds to postpone payment, but the trustee of the bonds declared a default.

The company was also hurt in 2012 by the revelation that one of its business partners faked $680 million in collateral for a loan Suntech had guaranteed. On top of that Suntech and other solar panel makers have struggled in recent years because of a sharp drop in prices.

Shares of Suntech have lost about 93 percent of their value over the last two years.

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