Suntech Power in talks with Wuxi government on bailout
Suntech Power, the mainland solar-panel maker with US$541 million in bonds due next month, is talking with the government of Wuxi about the possibility of financial support.
"The Wuxi government has been looking for measures to bail out Suntech," said Shi Dinghuan, president of the Chinese Renewable Energy Society and an adviser to the State Council. "The government won't let this well-known company enter catastrophe easily."
The comment indicates the breadth of talks between government officials and solar makers on how the industry can weather a plunge in prices, excess production capacity and the possibility of a trade war with the United States and Europe. No mainland solar company has yet received a bailout for its foreign debts.
Suntech, whose bonds are due on March 15, hired UBS last year and began talks with creditors about how to refinance the notes following a disclosure that it was a victim of fraud. In December, the company cut its forecasts for solar shipments.
"The government can offer support through tax policies, credit facilities, negotiations and helping consolidation, while it can't intervene in companies' operations directly," Shi said. "How the bailout works will depend on the local economy and expectations of the solar industry by the local government."
Wuxi's local authority declined to comment, saying talks with Suntech were confidential. Suntech would not comment either.
The mainland has supported solar companies through credit lines from China Development Bank and loans from local government authorities.