Stricken Suntech breaks silence

Beleaguered Chinese PV giant Suntech today gave investors some insight into its 2012 performance, along with an update on the multiple issues that it is firefighting in a bid to regain corporate stability.

In fourth-quarter and full-year preliminary figures, Suntech said its 2012 revenues came in at about $1.62bn, a year-on-year drop of 48%. Suntech’s gross margin for the year was around a negative 1.4%, with Q4 showing a positive 0.4%.

The company shipped about 1.8GW of PV products last year, which it said was in line with its guidance.

Q4 shipments were down about 4% on the prior three months, with revenues 8% lower at $358m.

While publication of the figures will be welcome, the company has delayed its final results and Suntech’s investors will be more focused on the future than on a 2012 that already seems a long time ago.

This year the company saw its main operating subsidiary, Wuxi Suntech Power Holdings, declared insolvent and became the first major Chinese company to default on its loans.

Today CEO David King told investors: "We are undertaking a number of restructuring initiatives to address Suntech's balance sheet and improve the company's cost structure and operational efficiency.

“We are making progress and are evaluating solutions that will take into account the rights and interests of all of our stakeholders.”

Wuxi Suntech is still working with the Chinese court-appointed administrator, who has scheduled a meeting for 22 May to discuss options for the company.

European operating subsidiary SPI, which in April was given a two-month moratorium on creditor claims, is working on a business plan of its own to “establish sustainable operations”, says Suntech.

Suntech is also still in discussions with holders of its defaulted-on bonds, most of who have given it a “forbearance” deadline of 15 May to sort out an acceptable deal.

And last but not least, the Chinese group – until recently the world’s biggest supplier of PV modules – is trying to unpick its investments in Global Solar Fund (GSF) – the Italian PV portfolio which was at one stage the subject of fraud claims by Suntech against a former partner.

The GSF pickle led Suntech to embark on a restatement of its 2010 and 2011 financial statements, a process it says is still subject to delay – but which, along with its 2012 Annual Report, it is “working diligently to complete…as soon as practicable.”