| HONG KONG, April 16
HONG KONG, April 16 Suntech Power Holdings Co
Ltd could offload its solar power generation assets in
Italy, a company spokesman said on Tuesday, as the struggling
Chinese solar panel maker scrambles to trim debts of more than
The former green tech poster child, with a New York Stock
Exchange listing and a market value of $16 billion at its peak,
last month defaulted on $541 million of its dollar-denominated
bonds and said its biggest subsidiary was bankrupt.
A source with direct knowledge of Suntech's search for a
cash infusion said last week it might consider selling its 88.15
percent stake in Global Solar Fund Sicar (GSF Sicar), a
Luxembourg-based fund specialising in the development of solar
power projects mainly in Italy.
"We intend to operate GSF for the time being and will
consider all options to maximize the value for our
stakeholders," a Suntech spokesman said in emailed reply to
Asked how it planned to use the proceeds of a sale and
whether it had received any interest in the assets, he said
Suntech would update investors "in the coming months".
It is the first time Suntech has publicly acknowledged it
could sell the GSF Sicar stake since its announcement last month
that its biggest subsidiary, Wuxi Suntech, was bankrupt and
would undergo a government-led restructuring.
By some estimates, the fund carries an enterprise value of
up to $800 million, including more than $600 million in loans
from China Development Bank, analysts say.
Suntech, one of the world's largest solar panel
manufacturers by capacity, is seeking to sell some assets and
bring in a strategic investor to repay debt and revitalise the
company, the source with knowledge of the matter told Reuters
Even if Suntech disposes of the stake in GSF Sicar, proceeds
would not nearly be enough to repay creditors, analysts say.
Creditors would still have to accept a debt restructuring in
which they might undertake a loss, convert some debt into equity
stakes in Suntech or extend the maturities of parts of their
Shares is Suntech, which peaked at $90 on the New York Stock
Exchange in 2008, fell to 58 cents on Monday.
Analysts say the recent settlement of a dispute between
Suntech and its former partner in the fund, GSF Capital, may
have paved the way for a sale, which in theory could generate
hundreds of millions of dollars in cash.
Suntech said in November that it had contributed 156 million
euros to the fund. Suntech's founder and former chairman Shi
Zhengrong, who holds the remaining 11.85 percent, had
contributed 19 million euros.
But any potential buyer would seek to drive a hard bargain
given that Suntech is under pressure to sell.
Suntech was struggling with a net debt-to-equity of around
200 percent and total debts of about $2.2 billion at the end of
That included loans from the International Finance Corp
(IFC), the private sector arm of the World Bank, and Chinese
lenders including Industrial and Commercial Bank of China
, Agricultural Bank of China
and Bank of China .
"I put a big question mark on whether Suntech can sell off
its stake in GSF soon," said Glenn Gu, a China-based analyst for
business information provider IHS. "It will not be a surprise if
the stake in GSF is sold at a big discount at the end of the
Suntech said last month it had settled a dispute with GSF
Capital Pte Ltd, which sold its 10 percent stake in GSF Sicar to
Suntech and a company owned by Shi as part of the settlement.
GSF Sicar owns 142-megawatt solar projects in Italy, 141 MW
of which are now connected to the grid -- including 118-MW
capacity that has obtained Italy's feed-in tariffs, the Suntech
Feed-in tariffs are government-subsidised power prices as
incentives for clean energy development. The euro zone debt
crisis has led to the world's biggest solar power producers such
as Germany and Italy slashing subsidies for renewable power,
triggering a plunge in solar panel prices in the last two years.
There are no signs of recovery in demand for solar panels
this year, according to top executives at several Chinese solar
panel makers interviewed by Reuters this week. Chinese solar
panel makers are also bracing for a decision to be made by the
European Union in June on whether to slap anti-dumping duties on