A subsidiary of Suntech Power Holdings (NYSE: STP), Wuxi Suntech Power Holdings, is the subject of a petition for insolvency and restructuring brought against it by a group of eight Chinese banks, Suntech announced today. The petition was filed in Jiangsu Province, China.
The insolvency and restructuring procedure is designed to facilitate "an orderly restructuring plan for both Wuxi Suntech and its creditors," according to Suntech. It said Wuxi Suntech will not object to the petition and it expects the court to decide in the next few days whether to accept the petition.
Wuxi Suntech manufactures photovoltaic cells and modules in China, and the company says it intends to continue production to meet customer orders.
"While we evaluate restructuring initiatives and strategic alternatives, we are committed to continuing to provide high-quality solar products to our global customer base," said Suntech CEO David King in the company's announcement. "We will continue to work closely with all of our stakeholders and take the necessary steps to put Suntech back on track for growth."
The company said Chinese courts typically appoint administrators to direct any restructuring and negotiations with creditors.
Suntech said neither the parent company nor any of its other subsidiaries have commenced insolvency proceedings. Earlier this week, Suntech announced it had been served a notice of default from the trustee of its 3% convertible notes after the company failed to pay $541 million in principal by the due date of March 15.