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Equity Interests in Wuxi Suntech and Its Subsidiary Purported to be Transferred to Third Party

published: 2014-04-14 11:07

Suntech Power Holdings Co., Ltd. announced that it is aware of the Hong Kong Stock Exchange announcement made by Shunfeng Photovoltaic International Ltd. that the conditions precedent to the purported acquisition of 100% of the equity interests of Wuxi Suntech pursuant to the terms and conditions under the restructuring plan of Wuxi Suntech as approved by the Wuxi Intermediate People's Court have been fulfilled, and as a result all of the equity interests of Wuxi Suntech shall be transferred to an affiliate of Shunfeng.

As of April 10th, none of the directors of Power Solar System Co., Ltd. (PSS), the joint provisional liquidators (JPLs) of Suntech Power appointed following Suntech Power's application for a provisional liquidation in the Cayman Islands, its jurisdiction of incorporation, or the liquidator of PSS, have given their approval to any transfer or disposal of the shares of Wuxi Suntech. As previously announced on February 10, 2014, the liquidator of PSS and the JPLs of Suntech Power will continue to focus on an investigation of, among other things, the purchase of PSS's equity interest in Wuxi Suntech by Shunfeng and to take all steps as necessary to remedy improper actions which have caused loss to Suntech Power, PSS, and their creditors. No assurances can be given, however, that Suntech Power retains equity interest in Wuxi Suntech, or the benefits having an equity interest entail. Neither Suntech Power nor the JPLs are currently able to exert management control or authority over Wuxi Suntech.

Notwithstanding the above, following negotiations by the JPLs with the current management at Wuxi Suntech, Suntech Power has entered into a Cooperation Agreement with Wuxi Suntech which provides a framework for the following (among other things):

  • Suntech Power licenses to Wuxi Suntech certain product certificates held by Suntech Power. It is expected, however, that Wuxi Suntech will obtain its own product certificates later in 2014 in due course
  • Suntech Power, including its distribution subsidiaries in the United States and Europe, will act as intermediaries for the sale of products manufactured by Wuxi Suntech, facilitating Wuxi Suntech entering into sales contracts with such customers. For a period of one year, Suntech Power would earn a commission from Wuxi Suntech in connection with any such sale
  • For a period of one year, Suntech Power, including its customer support representatives at its subsidiaries in the United States and Europe, would provide after-sales service for Wuxi Suntech manufactured products which have been sold
  • Wuxi Suntech would support the restructuring of Suntech Power International, Ltd., the principal operating subsidiary of Suntech Power in Europe which is currently engaged in a restructuring proceeding under Swiss law
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