China’s Suntech Power U.S. Unit Seeks Bankruptcy ProtectionMichael Bathon
A U.S. unit of China’s Suntech Power Holdings Corp., once the world’s largest solar-panel maker, followed its parent in seeking bankruptcy protection from creditors after increased competition pushed down prices.
San Francisco-based Suntech America Inc., an affiliate of Wuxi, China-based Suntech Power, today listed more than $100 million each in assets and debt in Chapter 11 filings in U.S. Bankruptcy Court in Wilmington, Delaware.
Suntech Power, following creditor demands, filed for Chapter 15 bankruptcy protection last February in Manhattan. U.S. bondholders moved to put the company into bankruptcy on their own with an involuntary bankruptcy liquidation under Chapter 7 after it defaulted on about $541 million of their debt.
The company’s main unit was pulled into bankruptcy proceedings by Chinese banks after it missed a bond payment in March 2013. Shunfeng Photovoltaic International Ltd., agreed to buy the unit for 3 billion yuan ($484 million).
Suntech America was forced to seek bankruptcy due to “a rapid decrease in the price of solar panels due to an expansion of Chinese solar panel manufacturing capacity,” Suntech Group Chief Restructuring Officer Robert Moon said in court filings.
The company was also hurt by the U.S. government’s effort to bolster the domestic solar industry by imposing tariffs on foreign products. Also, the sale of Wuxi Suntech crippled its manufacturing ability, forcing the Suntech Group to shift to selling and distributing.
Wuxi Suntech Power Co. is listed as the largest unsecured creditor, owed about $143.9 million for a former inter-company claim, according to court papers.
The case is In re Suntech America Inc., 15-10054 , U.S. Bankruptcy Court, District of Delaware (Wilmington). The Chapter 15 case is In re Suntech Power Holdings Co.; 14-10383, U.S. Bankruptcy Court, Southern District of New York (Manhattan).