Media Reports Suggest Suntech Power Holdings’ Subsidiaries to Go under Bankruptcy Protection
| 10 March 2013
Posted in News - SPVI news
According to Chinese media reports from NE21.com, Wuxi Suntech Power Co., Ltd., and its assets owned by Suntech Power Holdings Co., Ltd. (ADR)(NYSE:STP), will be overtaken by the Wuxi Guolian Group, a state-owned enterprise of Wuxi province, to start bankruptcy proceedings. The apparent takeover is to take place between March 15th and March 20th and will take on the form of the investment fund in which the company’s assets will be managed; or, if necessary, they will be disposed.
However, based on information from Solarzoom released afterward, Guolian will allow three subsidiaries of Suntech Power Holdings to go bankrupt, while Wuxi’s core assets will remain intact.
The first of those three subsidiaries is cell manufacturer Luoyang Suntech, holding 200MW of cell capacity and considered to have the most expensive and the oldest cell production lines. The second is Shanghai Suntech, apparently reminiscent of the thin-film production facilities as suggested by Solarzoom, but according to 20-F filing 2011 Annual Report, this location also holds 400MW of cell and module production lines with the company’s high-end efficiency product, the “Pluto” module. Finally, the third subsidiary is a facility manufacturing solar ingots and wafers; however, there is no clarity whether both Zhenjiang Rietech and Zhenjiang Rende New Energy Science Technology Co., or just one of them, will be allowed to go bankrupt. Suntech’s total wafer capacity was quoted by the company recently as 1.65GW.
In another report also mentioned by Solarzoom, the $575M convertible bond due on March 15th, 2013, has been settled with creditors. The bond is to be converted in half as an equity issue, while the other half is to be refinanced by guarantee of China Development Bank with a 5-year amortization period and an annual rate of 6%.
None of the media reports have been confirmed by the company.
In a separate news release on March 7th, 2013, Suntech announced the settlement of a dispute against the GSF Capital Pte Limited and its former employee Javier Romero.
As part of the settlement, GSF Capital will dispose of its entire ownership interest in Global Solar Fund, S.C.A., Sicar (the "Fund") for an agreed consideration and it will no longer have any ownership interest in the Fund. Suntech's equity interest in the Fund will increase from 79.3% to 88.15% and the equity interest owned by Best (Regent) Asia Group Ltd., a company ultimately held by Dr Zhengrong Shi, will increase from 10.7% to 11.85%. In addition, the court orders obtained by Suntech will be discharged. The settlement does not involve an admission of liability on the part of GSF Capital or Mr Romero.
According to a presentation given to investors by the company in July 2012, GSF holds ownership of 145MW of projects in Italy. Some estimates see the value of those assets in the area of $330M, in addition to revenues due to sale of electricity and payments based on feed-in-tariffs.
