Renewable Energy AssociationSolar Trade AssociationAct on Co2
Solar Panel News

Suntech’s Wuxi Subsidiary Declared Bankrupt

Suntech Power Holdings Co Ltd has announced that a Chinese court has accepted a petition to restructure and make insolvent its major operating subsidiary Wuxi Suntech Power Co Ltd. This move marks a rapid decline in the fortunes of the world’s largest manufacturer of solar panels.

Solar Panel Manufacturing
(image credit: stantontcady)

China is the largest manufacturer of solar panels in the world but their solar panel industry has struggled of late due to overcapacity and of course trading issues with the United States and countries in the European Union with America imposing import tariffs. Chinese solar panel companies have been benefiting from indirect support from the Chinese government and cheap borrowing.

On Wednesday, eight banks in China lodged a petition with a court in the province of Jiangsu to make the above subsidiary insolvent and to restructure it. Only a few days ago Suntech were unable to comply with the terms of a convertible bond for $541 million and defaulted on it. As at March 2012 their net debts amounted to $1.6 billion.

According to the law in China, the court will have a period of six months in which to produce a restructuring plan that will be placed before creditors although an extension of three months may be possible. An administration committee has been put in place by the court that includes a number of local government officials plus legal and accountancy professionals who will be responsible for administering the subsidiary’s restructuring.

Suntech made it clear that the insolvency and restructuring process was intended to ensure that both the subsidiary and their creditors deal with matters in an orderly fashion while restructuring their debt but still continue business operations including the production of customer orders.

We shall continue to monitor this situation closely and report developments as and when they take place. Let us hope that matters can be sorted out to all parties’ satisfaction.

This entry was posted in Renewable Energy and tagged , , . Bookmark the permalink.

Comments are closed.