China solar firm Suntech to get bailout, resist US bankruptcy

November 1, 2013
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Solar panels are on display at the Suntec Power Japan booth during the PV Expo in the World Smart Energy Week 2013 in Tokyo/AFP
Solar panels are on display at the Suntec Power Japan booth during the PV Expo in the World Smart Energy Week 2013 in Tokyo/AFP

, SHANGHAI, November 1- Troubled Suntech Power, a Chinese maker of solar products, said it would fight being forced into bankruptcy in the US and was to receive a $150 million local government bailout.

Suntech, once the world’s biggest maker of solar cells and panels, sought market share by driving down prices to levels which some competitors claim were loss making.

Solar products are one of the areas where China has been embroiled in bitter trade disputes with the EU and US, who accuse the government of unfairly subsidising the industry.

Suntech announced in March that its main subsidiary in China would seek bankruptcy and restructuring.

A government-backed firm, Wuxi Guolian Development Group, has now pledged to invest at least $150 million in the parent company, according to a Suntech statement this week.

Guolian is backed by the government of the eastern city of Wuxi, where Suntech is based. The local authorities are keen for the company to survive, as it is a major employer and taxpayer, analysts say.

Another local firm has pledged to invest in the Wuxi Suntech Power subsidiary, which is now in administration.

Separately, Suntech said in another statement Thursday it would challenge a petition for involuntary bankruptcy filed by a group of bondholders through a US court.

A New York court in September ruled in favour of the bondholders, who hold around $1.6 million of Suntech’s debt, it said.

Suntech earlier this year defaulted on payments on $541 million worth of bonds.

New York listed Suntech closed down 1.43 percent at $1.38 on Thursday.

The European Commission concluded an anti subsidy probe into Chinese solar panels in August and a response is due for approval by European Union (EU) leaders by the end of the year.

A European industry group, EU ProSun, said the commission found Chinese producers received government subsidies from cheap raw materials to electricity and funding of up to 11.5 percent of their sales.

At the same time, China is investigating imports of polysilicon used in manufacture of solar products from the EU on charges of dumping, or selling below market prices.

China’s Ministry of Commerce said Thursday it would extend the year long probe by another six months to May 1 next year.

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