China-based large-size solar firm Suntech Power Holdings announced that on March 18, 2013, a group of eight China-based banks filed a petition for insolvency and restructuring of its China subsidiary Wuxi Suntech Power Holdings (Wuxi Suntech) in the court of Wuxi, China. Wuxi Suntech notified the court that it will not file an objection against the petition. The firm expects that the court will decide whether or not to accept the petition in the next few days.
Suntech Power Holdings, the ultimate parent company of Wuxi Suntech, has not commenced insolvency proceedings, nor have any of the firm's other principal operating subsidiaries. The firm is not aware of any similar proceedings regarding any of its other entities, according to Suntech.
Suntech noted that Wuxi Suntech is the firm's principal operating subsidiary in China engaged in the manufacture of solar cells and modules. The firm has additional cell and module production facilities at wholly owned or partially owned subsidiaries in Wuxi, Shanghai and Luoyang, China, and, in the event insolvency and restructuring of Wuxi Suntech is approved by the court, the firm 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.
"While Suntech evaluate restructuring initiatives and strategic alternatives, the firm is committed to continuing to provide high-quality solar products to the global customer base," said David King, Suntech's CEO. "During this period, the firm will continue to work closely with all of the stakeholders and take the necessary steps to put Suntech back on track for growth."
The insolvency and restructuring procedure is designed to facilitate an orderly restructuring plan for both Wuxi Suntech and its creditors. In such proceedings, the China court would typically appoint administrators to Wuxi Suntech to administer the restructuring, including negotiations with existing bank lenders and other creditors. Wuxi Suntech will apply to the court to continue operations under the supervision of the administrators.