Reports suggest a deal is in the making that could see Suntech Power Holdings' bankrupt subsidiary rescued by the involvement of a rival Chinese PV manufacturer and several state-owned enterprises in Wuxi, China.
Reports say that Suntech Wuxi is in talks with five enterprises over separate deals to provide a much needed cash injection, with the company having debts of around US$1.75 billion.
The Wuxi regional government is said to be actively participating and reportedly said that creditors, which included numerous Chinese banks would have to take a ‘hair cut’ on loans or face higher losses. An official was also quoted as ruling out a liquidation of the company.
Based on a deal being struck with a possible Chinese rival, a cash injection would be part of deal, suggesting a merger is on the cards.
The Chinese government has wanted struggling companies to merge rather than file for bankruptcy or close down and become ‘zombie’ firms.
A Suntech spokesman would not confirm the reports, but said the company was in ongoing discussions with “strategic investors”.
