Chinese banks file for insolvency of Suntech Power subsidiary Wuxi

20 March 2013 16:15  [Source: ICIS news]

HOUSTON (ICIS)--A group of eight Chinese banks have filed a court petition for the insolvency and restructuring of Wuxi Suntech Power Holdings, the main operating subsidiary in China of Chinese solar panels and photovoltaics (PV) major Suntech Power, officials said on Wednesday.

Suntech Power, which is listed on the New York Stock Exchange, said that Wuxi Suntech would not file an objection to the petition.

Wuxi Suntech plans to continue production of solar products to meet customer orders, even if the court in Wuxi in Jiangsu province approves the banks' petition, Suntech Power said. Management would work with any court-appointed administrators to ensure that all of Suntech's product warranty obligations are met, it added.

“While we evaluate restructuring initiatives and strategic alternatives, we are committed to continuing to provide high-quality solar products to our global customer base," said David King, Suntech's CEO.

"During this period, we will continue to work closely with all of our stakeholders and take the necessary steps to put Suntech back on track for growth," King added.

Suntech Power Holdings, the ultimate parent company of Wuxi Suntech, has not commenced insolvency proceedings, nor have any of the company's other principal operating subsidiaries, the company said.

“The company is not aware of any similar proceedings regarding any of its other entities,” it added.

However, earlier this week, Suntech Power said it received a notice of bond default relating to Suntech's non-payment of $541m (€422m) that was due on 15 March.

According to a separate report by China’s official news agency Xinhua, the Chinese banks have about $1.1bn in outstanding loans and other claims against Wuxi Suntech.

Wuxi Suntech makes PV cells and PV modules at plants in Wuxi, Shanghai and Luoyang. Its insolvency comes amid overcapacities in the global solar panel and PV industry. In Germany, a number of solar firms filed for insolvency over the past 18 months.

($1 = €0.78)

By: Stefan Baumgarten
+1 713 525 2653

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