Solar panel maker announces default
BEIJING - The Associated Press
Chinese solar panel maker Suntech Power Holdings is likely to be bailed out by the state, despite a temporary reprieve from some debt holders. REUTERS photoChina’s Suntech, one of the world’s biggest solar panel manufacturers has defaulted on a $541 million bond payment in the latest sign of the financial squeeze on the struggling global solar industry.
Suntech Power Holdings announcement was a severe setback for a company lauded by China’s Communist government as a leader of efforts to make the country a center of the renewable energy industry. Its founder, Shi Zhengrong, became one of the industry’s most prominent entrepreneurs and a billionaire, only to see most of his fortune evaporate as the company’s share price plummeted.
The company is “exploring strategic alternatives with lenders and potential investors,” David King, who replaced Shi as a CEO last year, said in a statement on March 18.
Suntech was due to make a $541 million bond payment on March 15 but ran short of cash following heavy losses over the past year.
The company said it reached agreement with holders of 60 percent of the bonds to postpone payment but last announcement said the bonds’ trustee had declared a default. It said that triggered defaults on other debts to the International Finance Corp. and Chinese lenders.
“It is currently a very difficult time for our company and our industry, but the management and board of Suntech are committed to finding a way forward that will take into account the rights and interests of all of its constituents,” King said.