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* GSF to sell its stake in fund to Suntech, its founder
* Suntech says to discharge orders freezing GSF assets
By Swetha Gopinath
March 7 (Reuters) - Suntech Power Holdings Co Ltd settled a dispute over a partner's claim that it held German bonds as collateral for its investment in a solar development fund, but analysts said a $541 million convertible bond due this month remains a worry.
The partner, GSF Capital Pte Ltd, owned 10 percent in GSF Sicar, a Luxembourg-based investment fund created to invest in developing and operating solar projects with focus on Italy.
Suntech and its founder Zhengrong Shi hold the remaining stake in the fund. The solar panel maker removed Zhengrong as executive chairman on Monday, a move he termed "invalid."
GSF Capital would sell its stake in the fund for an undisclosed amount to Suntech and Zhengrong, Suntech said in a statement on Thursday.
China-based Suntech said in July that GSF Capital appeared to have defrauded it by falsely claiming it had posted 560 million euros ($728 million) in German bonds as collateral for solar power plants built by the fund in Italy.
The company said late last year it would reduce its 2010 net income by between $60 million and $80 million due to the fraud.
Suntech also said it plans to file the restated consolidated results in early 2013, but has not released quarterly results since the second quarter of 2012.
"This would seem to clear the way to finally getting results, but I'm not overly optimistic to hear something in the immediate future," said Raymond James analyst Alex Morris.
Court orders obtained by Suntech freezing the worldwide assets of GSF Capital and its founder Javier Romero would be discharged, the company said.
The settlement, however, does not involve an admission of liability on the part of GSF Capital or Romero.
Suntech, which had debt of $2.2 billion at the end of March 2012, has been hurt by a steep fall in panel prices.
"The biggest concern is the overhang due to the convertible bond which is due end of next week," said Thiemo Lang, a senior portfolio manager at Sustainable Asset Management in Zurich.
"Not sure how this is going to play out."
The company has hired investment bank UBS to evaluate alternatives for the notes.
Suntech's net debt-to-equity ratio of around 200 percent as of March 2012 must have since increased sharply, analysts said.
"Suntech has been granted plenty of lifelines in the past, but the end may finally be in sight," Raymond James said in a note in February.
Shares of the company, which has a market capitalization of about $181 million, were up 2 percent at $1.20 on the New York Stock Exchange. The shares peaked at $90 in 2008.