The sale of Suntech Wuxi took a new twist today as a local government controlled firm offered to provide a US$150 million cash injection in a rival bid.
Last week Shunfeng PV was identified as the “provisional strategic investor” and shares in Shunfeng were suspended as the acquisition looked close to nearing completion.
However, on Wednesday, Suntech revealed that the rival bidder Wuxi Guolian Development, a local government controlled investment entity, had provided an investment letter of intent.
Wuxi Guolian proposes an equity investment “not les than” US$150 million. It would also then merge some of its own solar and power generation assets into the company or create joint ventures between the two.
“Even though the investment letter of intent is indicative only and is not a firm commitment, this is an important step in the restructuring of the company with key stakeholders,” said Zhou Weiping, CEO, Suntech.
Zhou was appointed CEO of Suntech in September and previously worked at Wuxi Guolian Development.
“While there will be substantial dilution for existing shareholders, the successful implementation of these efforts will preserve the company's international platform, rebuild the company's operating assets and rehabilitate the company's global brand,” he added.
Earlier this year, parent company Suntech Power Group defaulted on a US$541 million convertible bond forcing Suntech Wuxi into bankruptcy proceedings.
Jifan Gao, CEO of module manufacturer Trina Solar, recently claimed that local government interference was getting in the way of the natural process of consolidation in China’s solar industry.