Suri reorganization vote failure will eventually lead to a liquidation

Polaris solar PV net news: October 23, ST Super-day reorganization meeting to vote (at the second meeting of creditors and investors) forthcoming, the meeting will decide the fate of *ST Suri and as many related benefits. Suri restructuring has received high attention and the contrast between late getting back, it caused a sensation earlier this year with “11 Super debt”.

The night of March 4, 2014 *ST Suri said in a statement that “11 Super debt” interest on this issue will not be on the original coupon date March 7 regularly paid, only to meet regular payments totaling 4 million Yuan. At this point, “11 Super debt” official declaration of default, becoming the first case of defaulted bonds.

Restructuring program is blocked

Today, Suri bankruptcy debts have principal and interest repaid in may, among other things “11 Super debt” passage of the debt restructuring in agreement. However, another a interests involving groups on draft proposed has against, to solar for representative of part general creditors think 20% of claims debt programme has contrary to fair, restructuring programme of compensation lines should in 20% of based Shang has improve, so solar, and Oriental day liters, and days Dragon photoelectric, and cross shop East magnetic, and Zhejiang Crystal section, and family real estate, 18 home well-known enterprise in Suzhou protest the restructuring programme.

In accordance with the requirements of 18 companies, repayment percentage is increased. They pointed out that Shanghai courts total number of bankruptcy cases in the past, and 30% with the lowest proportion of common claims of compensation, recent bankruptcy reorganization of Suntech proportion is to be repaid in 30%. If Suri stick 20% percentage of repayment, then the creditor may restructure voted against it, trying to make restructuring fails.

Industry analysts forecast meeting in Suzhou of ordinary creditors ‘ claims about representing more than 1 billion yuan, and their common claims the group totals may involve claims of 4.7 billion yuan. Raise one point each, meaning that future restructuring will pay 47 million dollars in cash.

As restructuring party, Jiangsu Association Xin led and collaborative of 8 party financial investors and nine home institutions said, participation came in while because “by Shanghai Municipal Government of invited”; while certainly also to shares of shell resources but needs fallback, Association Xin group made commitment, restructuring Hou through recovery production operating, and injected quality assets, various way, makes Super day Sun 2015, and 2016 achieved of by audit of belonging Yu mother company owner of net profit respectively not below 600 million Yuan, and 800 million Yuan, Otherwise on profit compensation in cash.

GCL executives said this step in restructuring, reorganization plan to the best interests of all parties into account and paid a reorganization with the ultimate price you can afford. Restructuring is saving chaori solar will reach Japan to stay in the a-share and Jiangsu Golden Concord’s position and advantages in the market maintained its industry and further expand.

However, before voting last day of the session, the two sides still cannot reach a consensus, confrontation put the Conference voting stalemate also brought potential variables for tomorrow’s vote.

According to the October 15 announcement only if creditors through on-site registration, Internet voting or mail votes as one of three ways to participate in the second meeting of creditors and voted, draft plan may be adopted without a vote. Otherwise, *ST Suri reorganization fails and may face bankruptcy and liquidation.

So, in relation to creditors in this seesaw battle, what will be the result?

Through is high probability but remaining risks

Shanghai chaori solar energy science and technology company limited of the adoption of the draft plan, need to attend a meeting of the same group a majority of the creditors agreed to the vote, and the amount of claims it represents a quarter of the group two-thirds per cent of the total claims.

In the vote tomorrow, a secured creditor claims groups, employee groups, tax claims and regular creditor groups 4 groups have the right to vote. Among them, the workers ‘ claims and the tax debt repayment in full; a secured creditor in accordance with the estimated value of the collateral priority of claim failed to collateral appraisal value can be paid as an ordinary creditor’s rights of claim and common claims section full of 200,000 yuan payment, partial payment in accordance with 20% of the more than 200,000 yuan.

According to guosen securities analysis, as Yang Wang, Shanghai investment development limited proportion of debt in the Group 70%, which also has strong government backing. Coupled with this so wide restructuring despite being led by the Jiangsu Golden Concord, but the original is by invitation from the Shanghai Government on this move, so by the secured creditor group is the probability of the event.

And a group of claims for workers and tax credit group, the recovery rate in both groups were 100%, so the vote for these two groups was determined.

Finally, ordinary creditor’s rights group, 11 Super jgbs are obtained by the creditor in satisfaction of the 100% rate, so that some of the creditors tended to favour in this case. Also, from the perspective of Rational Economics, probability of non-draft creditors approve restructuring as well.

But also exists risk, due to removed Super day debt holds people Hou, still has 192 bit general creditors, they of debt accounted for than over general claims group of two-thirds, and this part general creditors even Super day restructuring success also will suffered large loss, so not excluded part creditors may gave up voting right that voting claims accounted for than appeared not over two-thirds of possibilities, this is this times voting maximum of risk points.

If the vote fails the Suri faced delisting

In fact, bankruptcy is caused by financial hardship cannot pay its debts and cannot cover every topic in the whole event, so that nearly all the restructuring plans are impossible to please everybody, but to fight for the interests of most of the institutions and individuals.

So far, voting by means of reorganization complies with the interests of most of the institutions and individuals, but because it is “one-vote veto system”, may also appear as 192 debt as a share of the vote than higher ordinary creditors but not final results.

If the restructuring plan is not adopted, the second set of proposals in accordance with the provisions needed, but 9 restructuring including the GCL, and preparation and no second restructuring package.

Even if there is a second set of new programmes, recurrent bulletins and once again convene the creditors ‘ meeting to be more than 15 days after this new programme needed before December 31, the Court will complete. As of December 31, bankruptcy reorganization Bill could not be passed, Suri will share delisting, in the eyes of reorganizing party will lose value, Suri’s end will eventually go bankrupt, when creditors cannot get additional compensation, bankruptcy and liquidation rate is only 3.95%.

Meanwhile, follow the order of compensation after liquidation of enterprises, General creditor does not have the right of priority, which means that when the liquidation of the Suri, all creditors, even in the short term is not 3.95% compensation rates.

To restructure successfully to be paid under the programme of small creditors and agencies, hundred percent repayment and 3.95% there is a huge difference, it’s not difficult to understand as represented by the Canadian Solar’s big creditors had previously complained to the media had received threatening phone calls or messages. And the solar, sunrise in the East as the representative of the creditor concerned, real liquidation bankruptcies also is not on their side. Under the liquidation procedure and general creditors of the debt-service ratio will be lower.

Original title: Suri reorganization vote failure will eventually lead to a liquidation

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