Investors stand to lose most of the $1.28 billion they put into Suntech Power Holdings Co. (STP) after the solar manufacturer said it wouldn’t resist a bankruptcy petition filed in China.
The company, based in Wuxi, outside Shanghai, had more than $2 billion in debt and defaulted on $541 million in bonds due on March 15, prompting eight Chinese banks to ask a local court to push Suntech’s main unit into insolvency.
An employee inspects a solar panel on the production line at the Suntech Power Holdings Co. Ltd. facility in Goodyear, Arizona. For Suntech, which had more than $2.2 billion of debt at the end of March 2011, the outlook for survival is bleak. Photographer: Ken James/Bloomber
An employee walks into Suntech Power Holdings Co. headquarters, which is covered by photovoltaic panels, in Wuxi, Jiangsu Province, China. Photographer: Qilai Shen/Bloomberg
“There’s a host of companies that have gone to Wall Street investors and gotten billions of dollars, and these investors are ultimately going to be on the hook and get nothing out of it,” Angelo Zino, an analyst at Standard & Poor’s Financial Services LLC in New York, said in an interview yesterday.
The failure underscores how risks to investors in the solar industry have spread after the collapse of Solyndra LLC in 2011 and bankruptcies in Germany of companies including Q-Cells SE, previously the biggest solar manufacturer. The bankruptcy will make financing more difficult, Xie Jian, the chief operating officer of JA Solar Holdings Co., said today in an interview.
