Suntech seeks new cash after bankruptcy
Suntech Power, the Chinese solar panel maker that is in bankruptcy proceedings, is seeking up to US$150 million to revive its business, according to its court-appointed liquidators.
Suntech Power, the Chinese solar panel maker that is in bankruptcy proceedings, is seeking up to US$150 million to revive its business, according to its court-appointed liquidators.
Suntech plans to seek US$100 million to US$150 million of working capital from a strategic investor over the next six to nine months, said David Walker, one of the company's two provisional liquidators. The focus is to develop the retail solar business in the US, Japan and Europe after losing its main manufacturing assets in China, he said.
"The feedback from creditors is to pursue a restructuring to extract value from the company" instead of folding up, Walker said. "The focus is not necessarily solely on manufacturing. The best margin lies in retail."
Suntech's troubles followed a slump in solar module prices as expansion in production capacity outpaced growth in demand. The solar industry shakeout also forced Q-Cells of Germany to sell itself and Solyndra into liquidation. Shanghai Chaori Solar Energy Science & Technology missed payment on its debt last month in China's first onshore bond default.
Suntech, which is based in the eastern province of Jiangsu, defaulted on US$541 million of convertible bonds in March last year and filed for Chapter 15 bankruptcy in Manhattan in February this year to seek protection from US creditors.
Suntech's main manufacturing unit in China, Wuxi Suntech Power, was pulled into onshore bankruptcy proceedings by mainland banks after the bond default. Shareholders of Hong Kong-listed Shunfeng Photovoltaic International this month approved its acquisition of Wuxi Suntech for three billion yuan (HK$3.8 billion), which paves the way for the company to rejoin the ranks of the largest solar manufacturers.
The Wuxi-based company expects to ship at least 2.5 gigawatts of panels this year, exceeding the 2.1 gigawatts it delivered in 2011 that made it the world's biggest supplier.
