Any pretense of Suntech (NYSE: STP) being an independent entity is over.
China’s Suntech, faced with a debt crisis and with the fate of thousands of employees’ jobs hanging in the balance, “is poised to be taken over partly or entirely by the municipal government’s holding company in its hometown, Wuxi, China,” according to reports in the New York Times after a confirmation from a Wuxi official on Wednesday.
Wuxi, with billions of assets across a variety of industries, had been the rumored acquirer for a number of months.
This news comes on the heels of several losing quarters and a boardroom bloodbath involving the removal of Suntech’s wealthy founder as chairman, and the shuttering of its 50-megawatt Goodyear, Arizona solar panel factory.
Suntech was the world’s largest manufacturer of solar modules in 2011. But it now has cash issues and bond obligations of more than $500 million coming due. In July 2012, Suntech’s business partner, Global Solar Fund (GSF), faked $680 million in collateral for a loan backed by Suntech.
Late last year, LDK (NYSE: LDK), also troubled and also based in China, and one of the world’s largest producers of solar wafers and high-purity polysilicon, sold a 20 percent stake to Heng Rui Xin (HRX) Energy, a Chinese state-run entity, for approximately $23 million.
Any U.S.- or EU-based firm with financials similar to Suntech or LDK would long since be bankrupt, as in the case of Q-Cells or ECD.
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