Chinese court confirms Suntech insolvency

Stricken Chinese PV group Suntech says a court in its home city of Wuxi, Jiangsu Province, accepted a petition for the insolvency and restructuring of its main operating subsidiary, Wuxi Suntech Power Holdings.

The petition was filed by a group of eight Chinese banks, and was not opposed by Suntech’s parent group.

A statement from the Suntech group says the court has appointed “an administration committee, consisting of local government representatives and accounting and legal professionals.”

The statement adds: “The insolvency and restructuring procedure is designed to facilitate an orderly process for both Wuxi Suntech and its creditors.

“The primary goal is to restructure Wuxi Suntech's debt obligations, while continuing production and operations.”

Suntech was at pains to stress that group parent Suntech Power Holdings or any of its other subsidiaries are not involved insolvency proceedings, and "the administration committee are committed to maintaining all of Suntech's product warranty obligations".

Suntech has been heading for crisis since it became clear that it would not be able to meet the repayments on $541m of bonds, due last week.

Speculation is mounting that Suntech will ultimately be rescued by the Wuxi government.

Yesterday it appointed a new president, Weiping Zhou, to  work on “defining the strategic direction” of the company.

Prior to joining Suntech, Zhou served as chairman of Guolian Futures, a unit of Wuxi Guolian Development Co., which is partially owned by the municipal government of Wuxi city.