Following mounting speculation, Suntech has finally confirmed today that a group of eight Chinese banks filed a petition for insolvency and restructuring against Wuxi Suntech on March 18, after the company defaulted on a US$541 million bond last Friday.
In a statement released today, Suntech said its photovoltaic cell and module manufacturing subsidiary has not objected to the petition. It now expects the Wuxi Municipal Intermediate People's Court in Jiangsu Province, China, to either accept or decline it in the coming days.
If the petition is accepted, a restructuring plan for Wuxi Suntech and its creditors will be formulated, most likely with the help of administrators. "Wuxi Suntech will apply to the Court to continue operations under the supervision of the administrators," said Suntech in the statement.
Speaking to pv magazine at this year's PV Project Implementation Conference China on March 18, Alex Zhu, Senior Director, Global Product Management, at Suntech, candidly described bankruptcy as "a good thing" for Suntech.
He predicts that the Suntech situation will be settled within one month and that a bankruptcy would provide the needed restructuring for the manufacturer to emerge as a leaner more competitive player in the industry.
Neither parent company, Suntech Power Holdings Co., Ltd nor its other principal operating subsidiaries are said to have filed for insolvency. The statement continued, "The Company has additional cell and module production facilities at wholly owned or partially owned subsidiaries in Wuxi, Shanghai and Luoyang and, in the event insolvency and restructuring of Wuxi Suntech is approved by the Court, the Company intends to continue production of solar products to meet customer orders.
"In addition, management will work with any Court-appointed administrators to ensure all of Suntech's product warranty obligations are met."
State takeover
It is widely believed that the Wuxi Government will step in to save Suntech. According to a representative from Chinas Wuxi Municipal Government, who spoke to pv magazine in January, and correlating with various global media reports, the local government is prepared to take Suntech over, either wholly or partially.
Backing this up, a Chinese module manufacturing insider and former industry analyst further told pv magazine last week that he sees the Wuxi government stepping in, in order to prevent significant job losses and to retain the production capacity it has helped establish in Wuxi. As such, he does not expect production capacity will disappear, even in a bankruptcy scenario.
Amid these rumors, Suntech also announced today the appointment of Weiping Zhou, former chairman of Guolian Futures Co., Ltd and finance department manager of government-owned investment company Wuxi Guolian Development (Group) Co., Ltd, executive director and company president.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.
By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.
Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.
You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.
Further information on data privacy can be found in our Data Protection Policy.