Sunpower Group responds to SGX queries, says it hasn't breached any loans provisions

Singapore

SUNPOWER Group is not in breach of any of its loan provisions following unauthorised transfers of shares belonging to two of its substantial shareholders, and is able to continue as a going concern, the group said in response to queries from the Singapore Exchange (SGX).

This comes after executive chairman Guo Hongxin and executive director Ma Ming had each entered into a loan agreement in their personal capacities with America 2030 Capital to take a loan for their personal use. In an earlier announcement to the Singapore Exchange on Nov 8, the company said that Mr Guo and Mr Ma had both discovered that their 14 million ordinary shares each, which had been deposited in a designated account as collateral, were allegedly no longer in the account.

Sunpower has issued convertible bonds of US$110 million due 2022 to Glory Sky Vision (GSV) as well as a second tranche of convertible bonds for up to US$70 million due 2022 to Blue Starry Energy (BSE) and GSV, Sunpower said in the response to SGX on Wednesday. BSE is beneficially owned by DCP Capital Partners and GSV is beneficially owned by CDH China Management Company.

Under the convertible bonds agreements, Mr Guo and Mr Ma are not to dispose of more than 20 per cent of their combined holdings in the shares of the companies unless the outstanding bonds have fallen below 5 per cent.

"The company understands that the shares of Mr Guo and Mr Ma (of approximately 1.89 per cent each of the total issued share capital of the company), which have been transferred without authority, is less than the percentage as stipulated in the foregoing restriction," said Sunpower.

In the Nov 8 announcement, the group said that Mr Guo has a direct and indirect interest of about 19.98 per cent in Sunpower, while Mr Ma's direct and indirect interest represents about 17.39 per cent of the total issued shares of the company.

Sunpower also highlighted that there are no specific restrictions under the bonds agreements imposed on Mr Guo and Mr Ma with respect to pledging any securities, and added that there was thus no breach of the provisions in the agreements from them pledging shares as collateral to America 2030.

Sunpower highlighted: "The America 2030 loan agreement constitutes borrowings of the group's substantial shareholders and do not, in any way, constitute borrowings of the group. Given the foregoing, as well as ... (the response that) the group is not in breach of any of the terms of its borrowings, the board is of the opinion that the America 2030 loan agreement does not have any bearing on the group's borrowings and the group is therefore able to continue as a going concern."

Sunpower had said previously that Mr Guo and Mr Ma have commenced legal proceedings in the Supreme Court of Singapore to get back the shares. On Nov 8, the Court granted an interim injunction to restrain America 2030 and parties working with it from selling, forfeiting, transferring or dealing with the shares.

On Oct 24, SGX had also queried Sunpower, pointing to unusual trading activity in the company's shares.

Sunpower shares closed a cent higher at S$0.385 on Wednesday.