Suntech CEO steps down, CFO to take top job
(Reuters) - Suntech Power Holdings Co Ltd replaced its chief executive officer on Wednesday as China's largest solar maker struggled to shore up finances amid a growing cash shortfall.
Suntech said founder and CEO Zhengrong Shi had been replaced by David King, the company's chief financial officer. Shi's chairman title will also be changed to executive chairman and he will take the position of chief strategy officer.
Shi, who founded Suntech in 2001, has been the most prominent of China's solar entrepreneurs, building the company into the world's largest panel maker by manufacturing capacity.
Its disclosure at the end of July that it had likely been defrauded by a partner raised new fears that it may struggle to cover a convertible bond due in early 2013.
A spokesman for the company in Shanghai said executive moves were not related to the disclosures about the potential fraud by its partner, or its current financial situation.
"Dr. Shi has personally been considering this transition for some time. The new management structure will free up Dr. Shi to focus on strategy and key relationships with the government, customers, banks and vendors," Rory Macpherson, director of investor relations, said in an email.
The company has said it was working with existing lenders to secure new financing and considering a debt issuance in China.
That cash crunch, as well as the increasingly tough market conditions for solar companies, pushed the company's shares to lifetime lows earlier this month.
Avian Securities analyst Mark Bachman said he expected the company would ultimately want to pull its U.S.-based shares, since investors in the United States have largely abandoned the company.
"I just don't see how appointing the CFO to this (CEO) role brings any confidence" to the market, he said.
Macpherson denied that Suntech was considering any move to pull its shares from the New York Stock Exchange.
Suntech's shares were down 4.7 percent at $1.01 at midday on the NYSE, bringing their decline so far this year to more than 52 percent.
Like others in the industry, Suntech has seen profit disappear as the huge expansion in solar manufacturing far outpaced growth in solar demand, creating a glut of the panels that turn sunlight into electricity.
New import duties in the United States on Chinese-made solar products and a trade complaint lodged in Europe have also hurt prospects for China's solar companies, which produce about two-thirds of the world's supplies.
The company also disclosed on July 30 that its partner in power plant developer Global Solar Fund (GSF) may have fraudulently claimed to have posted 560 million euros ($690 million) in German bonds that were needed as collateral for construction loans.
Analysts have speculated that could leave Suntech liable for posting the collateral for those projects in Italy, and may prevent it from selling GSF as planned to raise money to cover the $541 million convertible bond that comes due early next year.
But Suntech said the financing for Italy projects that was provided by the China Development Bank was separate from the German bonds that had pledged by its partner, GSF Capital.
GSF is 80 percent owned by Suntech, 10 percent owned by Shi, and 10 percent owned by GSF Capital.
On Tuesday, Suntech said it had won a court order freezing the global assets of GSF Capital. ($1 = 0.8116 Euro)
(This story corrects in paragraph 2 to show Shi's chairman title has been changed, not stepping down)
(Reporting by Matt Daily in New York; Editing by Gerald E. McCormick, Maureen Bavdek and Matthew Lewis)