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UPDATE 1-Shunfeng chosen as preferred bidder for Suntech's main unit
October 10, 2013 / 3:39 AM / 4 years ago

UPDATE 1-Shunfeng chosen as preferred bidder for Suntech's main unit

* Shares in Shunfeng surge for second session on bid

* Bid’s success will depend on talks with creditors -source

* Wuxi Suntech has $1.75 billion in debt

* Size of Shunfeng’s bid is not known (Adds details, context and quotes)

By Charlie Zhu

HONG KONG, Oct 10 (Reuters) - Chinese solar panel maker Shunfeng Photovoltaic International Ltd has been chosen as the preferred bidder for a stake in the main unit of troubled rival Suntech Power Holdings Co Ltd, according to a notice issued by China’s Wuxi government.

Shares of Shunfeng surged more than 13 percent on Thursday morning, adding to a more than 20 percent gain on Wednesday after the company said it had submitted a bid.

A source close to the situation said the success of the bid would depend on whether Shunfeng could strike a debt restructuring deal with Wuxi Suntech’s creditors.

Amid a worsening glut in solar panels globally, Wuxi Suntech filed for bankruptcy protection in China in March, five days after its New York-listed parent company defaulted on a $541 million dollar convertible bond. The unit has $1.75 billion in debt.

Shunfeng won the auction by beating out its only rival bidder - a consortium led by Wuxi Guolian, the investment arm of the city government of Wuxi where Suntech is headquartered, according to the government notice seen by Reuters.

The value of the bid is not known. Shunfeng has made a 500 million yuan ($82 million) deposit on the offer, which is aimed at strengthening its solar cell and module manufacturing capability and aiding its diversification into the operation of solar power plants.

Representatives for Shunfeng and Suntech Power were not immediately available for comment. (Editing by Edwina Gibbs)

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