Chinese solar panel company Suntech Power Holdings (STP) saw its stock drop over 8 percent Monday after news on Friday that more of the company’s assets in Italy had been seized. Suntech’s massive bankruptcy has made for a wild ride for share-holders, with the company’s stock reaching 52-week highs in January, plunging in March when the company filed its petition for insolvency because of its Global Solar Fund (GSF) projects in Italy, but recovering much of that value by early October. Now, news that the company has had more assets seized, as well as the fact that debtors and investors could be taking a haircut in the bankruptcy, has sent Suntech back into a tailspin.
Dark Days for Suntech?
Suntech announced Friday that Italian courts had seized another 5.3 MW of capacity from solar fields built by GSF on September 23, and then an additional 1.9 MW on October 4. All told, this means that 47 sites with a generating capacity of 37.8 MW have been seized. The company’s issues with the Global Solar Fund can be traced to a $500 million loan Suntech secured from Chinese banks using German bonds as collateral that were subsequently revealed to be forgeries. Now, the company owes some $1.75 billion and has been placed into insolvency by its Chinese creditors. GSF, meanwhile, has lost some 27 percent of its assets.
Targeted by American Bankruptcy Filing
Despite having its own litany of issues, Suntech is also dealing with two lawsuits in the United states surrounding the high-profile bankruptcy of American companies Solyndra and Energy Conversion Devices. Both companies went out of business during when the market bottomed out over the last two years, but they’ve each filed suits alleging their failures were the result of unfair trade practices by Chinese companies including Suntech, Trina Solar Limited (TSL) , and Yingli Green Energy (YGE) .
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