Oct 30, 2013 - Chinese state-owned enterprise Wuxi Guolian Development (Group) Co is willing to make a cash injection of at least USD 150 million (EUR 109m) into troubled Suntech Power Holdings Co Ltd (NYSE:STP), the latter said today.
The China-based solar products maker has received an investment letter of intent (LoI) from Wuxi Guolian. The financial support is intended to back Suntech’s comprehensive rehabilitation and financial and operational restructuring, it says. Furthermore, Guolian is planning, subject to certain conditions, to inject related solar and other operations it owns into Suntech or enter into joint ventures with the latter in a bid to benefit from Suntech's global platform, distribution networks and additional synergies.
“While there will be substantial dilution for existing shareholders, the successful implementation of these efforts will preserve the Company's international platform, rebuild the Company's operating assets, and rehabilitate the Company's global brand,” said Suntech chief executive Zhou Weiping. He noted that the investment LoI was indicative only and not a firm commitment.
Earlier, Wuxi Guolian took part in a tender for Wuxi Suntech Power Holdings, the principal unit of Suntech in China that is in administration at present. Last week, sector player Shunfeng Photovoltaic International Ltd (HKG:1165) inked a strategic cooperation deal with Wuxi Suntech, after earlier in October it was provisionally selected as the strategic investor in the Suntech subsidiary. The strategic investor will be officially named once approved by the Wuxi Suntech creditor's meeting on November 12. A final confirmation is needed by the Wuxi Intermediate People's Court.
(USD 1 = EUR 0.726)
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