Wuxi Suntech deal 'close' – CEO
Shunfeng’s proposed acquisition of Wuxi Suntech is “very close to being finalised”, insists Wuxi Suntech’s new chief executive Eric Luo, allowing the PV manufacturer to revert to an expansionary mode.
Luo, formerly Suntech’s senior vice president for global supply chain, insists that there have been no delays or problems with the acquisition, explaining that as a Hong Kong-listed company Shunfeng is simply proceeding through the normal regulatory and shareholder approval processes.
When pressed on the ongoing legal battles related to the 2013 bankruptcy of Suntech Power Holdings (SPH) – Wuxi Suntech’s former owner – such as SPH’s recent victory over Suntech Singapore in a Singaporean court, Luo says: “Keep in mind that Shunfeng is buying [Wuxi Suntech] not from Suntech Power Holdings, but from the court-appointed administrator [in China].”
Luo is keen to stress that Wuxi Suntech will operate as an independent company within its new owner.
Many in the industry have assumed that Wuxi Suntech would exist in future essentially to feed Shunfeng’s voracious downstream appetite. But Luo says Wuxi Suntech will sell as much capacity as possible overseas – and only sell into Shunfeng if it has no better offers.
“Our goal is export as much as we can,” he says. “If we have enough overseas orders – even 100% – we’ll take it.”
In that case, Shunfeng will simply buy modules from other Chinese suppliers for its projects, he says.
Knowing that Shunfeng will act as a buyer of last resort, however, gives Wuxi Suntech many advantages.
Having produced “nearly 1GW” in 2013 – a huge fall off from previous years – Wuxi Suntech is aiming to lift its capacity from today’s 2.5GW to 3GW-3.5GW by the end of the year.
The speed at which it ultimately decides to expand will depend on a number of factors, “particularly the movement of the Chinese market”.
Aside from the 3GW utility-scale pipeline that Shunfeng intends to bring on line in China this year, Shunfeng and Wuxi Suntech are also planning to develop and build 300MW-500MW overseas – “in Japan, the UK and some emerging markets”, Luo says.
Of the 7GW that Chinese module suppliers are allowed to export into the EU this year, Wuxi Suntech’s allocation is “more than 500MW”, a top-three carve-out, he says.
The company is especially ambitious with regard to the UK, which is expected to be the largest PV market in Europe during the first quarter.
Luo acknowledges that bankability has been an issue for Wuxi Suntech over the past year, but believes those issues will be laid to rest once Shunfeng’s acquisition has been finalised.
The company is “discussing some big potential projects” in the UK, Luo adds, details of which may be revealed within a few weeks.