Suntech (STP +0.00%) has been served a notice of default from the trustee of its 3% convertible notes after the China-based company failed to pay $541 million in principal by the due date of March 15, Suntech announced today.
The incident has triggered cross-defaults of several of Suntech's other debt obligations, including loans from the International Finance Corporation and lenders in China.
The firm is currently burdened with more than $2 billion in debt. It said it is exploring means to save costs and raise capital while maintaining relationships with its existing customers and suppliers.
Earlier this month, Suntech announced it had signed a forbearance agreement with the holders of more than 60% of the Company's 3% convertible notes, indicating that if the company failed to make the March 15 payments, those who had signed the agreement would hold off on taking action until May 15.
In its press release today, Suntech said it was "thus far unaware of any legal proceedings initiated by any Note holders against the Company. Suntech intends to continue to engage with holders of the Notes and other lenders with a view to achieving a consensual restructuring."
