Suntech Gets Local Government Support After New York Warning
Suntech Power Holdings Co. (STP), the biggest solar panel maker, got an offer of support from the regional government in the Chinese city it’s based in after receiving a delisting warning from the New York Stock Exchange.
The eastern city of Wuxi set up a task force led by Mayor Zhu Kejiang to help Suntech, the government said today in an e- mailed statement. The city will hold talks to ensure banks optimize credit support and provide financial services to Suntech.
The average closing price of Suntech’s American depositary receipts was below $1 for 30 consecutive days as of Sept. 10, triggering a delisting warning, the Wuxi, Jiangsu-based company said Sept. 21.
The company secured 200 million yuan ($32 million) from Bank of China Ltd., China Business News reported, citing unidentified people. Suntech may also receive syndicated loans from banks including Industrial & Commercial Bank of China Ltd., Bank of China, Agricultural Bank of China, China Construction Bank Corp. and China Development Bank Corp., according to the report.
Rory Macpherson, a spokesman for Suntech, didn’t reply to an e-mail seeking comment.
The bailout is the second from a Chinese local government to a non-state solar company and underscores the challenges facing the industry as companies struggle to cope with an oversupply that’s depressed prices and trimmed profit margins. The Xinyu government said in July it would pay a portion of the debts of LDK Solar Co., the second-biggest solar-wafer maker.
The regional government in Wuxi, along with financial institutions, is studying further measures to develop the photovoltaic industry and will “actively and firmly” help Suntech, it said in the statement.
China Development Bank, a state-owned lender, is preparing to recommend stronger financial support for Suntech, Trina Solar Ltd. (TSL) and Yingli Solar Co., the official China Securities Journal reported on Sept. 25, citing an unidentified person. Trina is also based in Jiangsu, the biggest Chinese province by photovoltaic exports.
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