On Monday, 18 March, Suntech said it has defaulted on a $541 million bond payment. Suntech was due to make the payment on Friday but ran short of cash following heavy losses over the past year.
Suntech revealed that it will not file an objection against the petition. In the event insolvency and restructuring of Wuxi Suntech is approved by the Court, the Company intends to continue production of solar products to meet customer orders. In addition, management will work with any Court-appointed administrators to ensure all of Suntech’s product warranty obligations are met, a statement from the company said.
“While we evaluate restructuring initiatives and strategic alternatives, we are committed to continuing to provide high-quality solar products to our global customer base,” said David King, Suntech’s CEO. “During this period, we will continue to work closely with all of our stakeholders and take the necessary steps to put Suntech back on track for growth.”
The bankruptcy move will result in a new restructuring, and possibly a takeover by the government. Meanwhile King said the company is exploring opportunities “with strategic lenders and potential investors.”
The insolvency of Suntech will put the solar industry in utter distress. The Chinese solar maker had climbed to the peak in 2011 attaining the No.1 position globally. The fall of Suntech reflects the woes facing the solar industry across the world.
Suntech recently announced it is closing the solar panel manufacturing facility at Goodyear, Arizona, on April 3, 2013, with forty-three employees affected. The decision was driven by Suntech’s global restructuring efforts to rationalize production capacity and reduce operating expenses by 20 percent in 2013, the company said.
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