The main subsidiary of Suntech Power, one of the world’s largest makers of solar panels, collapsed into bankruptcy in a remarkable reversal for what had been part of a huge Chinese government effort to dominate renewable energy industries.
Suntech, a centerpiece of the country’s efforts, had grown to 10,000 employees in its hometown, Wuxi, on China’s east coast, and even set up a small factory in Arizona to assemble panels. But a tenfold expansion of Chinese solar panel manufacturing capacity from 2008 to 2012 pushed down the price of solar panels about 75 percent, undermining the economics of the business. (...) The rapid expansion of natural gas production in the United States and a curtailment of subsidies in the European Union also hurt prices, as did the United States’s imposition of import tariffs totaling about 40 percent after an antidumping and antisubsidy investigation last year. The European Union is completing its own trade investigation of Chinese solar panel shipments that could lead to steep tariffs there as well.
After Suntech grew spectacularly, with production that soared year after year on heavy investment, and after Western investors bought up its New York-traded shares and its international debt issues, the company was battered by plummeting prices as the overall manufacturing industry sank.(...) Chinese banks quietly asked a court in Wuxi on Monday to declare the operating subsidiary, Wuxi Suntech, insolvent and begin reorganizing it. The subsidiary notified the court on Wednesday that it did not object to the insolvency petition. Suntech Power, the parent, said that it was not filing for bankruptcy and would continue to honor warranties on the company’s solar panels. The bankruptcy filing is widely expected to lead to a takeover of the Wuxi operations by Wuxi Guolian Development Group, a financial conglomerate controlled by the city government of Wuxi.
After Suntech grew spectacularly, with production that soared year after year on heavy investment, and after Western investors bought up its New York-traded shares and its international debt issues, the company was battered by plummeting prices as the overall manufacturing industry sank.(...) Chinese banks quietly asked a court in Wuxi on Monday to declare the operating subsidiary, Wuxi Suntech, insolvent and begin reorganizing it. The subsidiary notified the court on Wednesday that it did not object to the insolvency petition. Suntech Power, the parent, said that it was not filing for bankruptcy and would continue to honor warranties on the company’s solar panels. The bankruptcy filing is widely expected to lead to a takeover of the Wuxi operations by Wuxi Guolian Development Group, a financial conglomerate controlled by the city government of Wuxi.
More details:
Suntech Defaults On 3% Convertible Notes, Signaling Further Financial Trouble
Suntech Subsidiary Files For Insolvency In China, Plans RestructuringSuntech Solar Update: Wuxi Becomes Board Member, Jiangsu Approves Bankruptcy
Chinese Government Considers Reducing Subsidies For Large Solar Projects
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