Chinese solar energy and systems manufacturer Suntech Power Holdings Company extended a forbearance agreement with what it says as "a majority" of its unpaid convertible bond holders. The company was reported to have been unsuccessful in paying the bondholders as the company went bankrupt in March.
The agreement gives leeway to the company, extending the time until August 30. The agreement also stipulates that bondholders will have the right to select two directors, according to Suntech Power Holdings in a statement released today. The company is based in Wuxi, China.
"We are contemplating an equitization of all major debt claims," said the company.
Two years ago, the company was considered as the world's largest panel maker by shipments. The company lost its edge as competitors surged with newer manufacturing tools which boosted their production, said analyst at Stifel Nicolaus & Company Jeffrey Osbourne.
"I don't see a light at the end of the tunnel for them," Osbourne predicts. "China wants to consolidate the industry but it's difficult to sell a company with equipment that's four years out of date. This is just a delay in their inevitable execution," he continued.
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