Struggling Chinese solar panel maker Suntech Power Holdings could offload its solar power generation assets in Italy, writes Reuters. The former green tech poster child, with a New York Stock Exchange listing and a market value of $16 billion at its peak, last month defaulted on $541 million of its dollar-denominated bonds and said its biggest subsidiary was bankrupt, writes Reuters.
Reuters – Suntech Power Holdings Co Ltd could offload its solar power generation assets in Italy, a company spokesman said on Tuesday, as the struggling Chinese solar panel maker scrambles to trim debts of more than $2 billion. The former green tech poster child, with a New York Stock Exchange listing and a market value of $16 billion at its peak, last month defaulted on $541 million of its dollar-denominated bonds and said its biggest subsidiary was bankrupt. A source with direct knowledge of Suntech’s search for a cash infusion said last week it might consider selling its 88.15 percent stake in Global Solar Fund Sicar (GSF Sicar), a Luxembourg-based fund specialising in the development of solar power projects mainly in Italy. “We intend to operate GSF for the time being and will consider all options to maximize the value for our stakeholders,” a Suntech spokesman said in emailed reply to Reuters. Asked how it planned to use the proceeds of a sale and whether it had received any interest in the assets, he said Suntech would update investors “in the coming months”. It is the first time Suntech has publicly acknowledged it could sell the GSF Sicar stake since its announcement last month that its biggest subsidiary, Wuxi Suntech, was bankrupt and would undergo a government-led restructuring. By some estimates, the fund carries an enterprise value of up to $800 million, including more than $600 million in loans from China Development Bank, analysts say. Suntech, one of the world’s largest solar panel manufacturers by capacity, is seeking to sell some assets and bring in a strategic investor to repay debt and revitalise the company, the source with knowledge of the matter told Reuters last week. Even if Suntech disposes of the stake in GSF Sicar, proceeds would not nearly be enough to repay creditors, analysts say. Creditors would still have to accept a debt restructuring in which they might undertake a loss, convert some debt into equity stakes in Suntech or extend the maturities of parts of their debts. Shares is Suntech, which peaked at $90 on the New York Stock Exchange in 2008, fell to 58 cents on Monday.
DISTRESSED ASSET Analysts say the recent settlement of a dispute between Suntech and its former partner in the fund, GSF Capital, may have paved the way for a sale, which in theory could generate hundreds of millions of dollars in cash. Suntech said in November that it had contributed 156 million euros to the fund. Suntech’s founder and former chairman Shi Zhengrong, who holds the remaining 11.85 percent, had contributed 19 million euros.
