March 20 (Bloomberg) -- Suntech Power Holdings Co., the world’s largest solar-panel maker in 2010 and 2011, will declare “bankruptcy reorganization” today, China’s official Xinhua News Agency reported.
The company, based in Wuxi, China, said on March 18 it defaulted on $541 million of convertible bonds, prompting speculation on its future. Earlier, Suntech said it was talking with local government agencies in the region about financial support and also negotiated a two-month forbearance with 63 percent of its bondholders.
Shi Zhengrong, who was ousted as chairman earlier this month, while remaining a director, said he couldn’t comment on whether the company will file for bankruptcy.
“You’ll have to wait to see if there’s an announcement,” he said by telephone today.
Calls to the company’s head office weren’t answered today.
The bankruptcy would follow more than a dozen others by solar manufacturers such as Q-Cells SE, which went out of business after a jump in factory capacity created a glut in photovoltaic panels, cutting margins across the industry.
The move will bring China a step closer to consolidating its solar industry, which includes four of the top six panel makers. Suntech more than doubled its annual production capacity to 2,400 megawatts in 2011 from 2009, according to data compiled by Bloomberg. It had more than $2.2 billion of debt at the end of March 2012, the data show.
The company hasn’t released earnings since then, after announcing in July 2012 that it may have been the victim of fraud involving 560 million euros ($725 million) of German bonds that may have never existed.
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