Suntech Power mulls restructuring or exchange of convertibles due 2013

By Toni Weeks

San Diego, Nov. 14 - Suntech Power Holdings Co., Ltd. said that it may restructure its convertible notes due 2013, conduct an exchange offer for them or enter into a strategic investment in connection with either an exchange or restructuring as a way to enhance the company's capital structure, according to a filing with the Securities and Exchange Commission.

The company listed its capital structure objectives and alternatives in its presentation to bondholders on Wednesday. According to the filing, the company's capital structure objectives are to

• Set annual goals for debt level reduction;

• Address 2013 convertible bond maturity;

• Reduce overall debt levels;

• Preserve cash to ensure the business has the liquidity needed to operate and restructure; and

• Ensure customer confidence in the company's balance sheet.

The company considered other alternatives to enhance its capital structure, such as a domestic loan, but the company said that although loans may be available to refinance existing bank debt as it matures, credit support to repay offshore debt is not available.

Suntech also considered a domestic bond offering but felt it could not successfully market the bonds at this time.

The final alternative considered was an asset sale, but due to current litigation, GSF was not saleable until the litigation is resolved. Suntech also said it has no other non-core assets sizable enough to generate significant proceeds and believed there was limited interest from buyers in its manufacturing capacity.

Suntech is a global manufacturer and distributor of solar panels. Its headquarters are in Wuxi, China.

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