The World's #1 Renewable Energy Network for News, Information, and Companies.

Analysts Say Solar Power Company Suntech's Debt May Be Insurmountable

Analysts Say Solar Power Company Suntech's Debt May Be Insurmountable

Suntech Power Holdings Co., the biggest solar-panel maker in the world, may have few options as it seeks to renegotiate its debt, according to Pavel Molchanov, an analyst at Raymond James & Associates Inc.

The solar company, based in Wuxi, China, hired UBS AG as part of an initiative to extend “the maturity of credit facilities” and “evaluate alternatives,” according to a statement yesterday.

Suntech has $541 million of convertible notes due in March, more than triple its market value of $164 million. It has a total of almost $2.3 billion in debt and is expected to report a loss of $495 million this year, the average of five estimates compiled by Bloomberg, as panel prices fall. The company is overleveraged and will face difficulties shoring up its balance sheet, Molchanov said in an interview.

“I’d be interested to see the rabbit Suntech and UBS can pull out of their hat,” he said.

Converting the notes due in March into common equity isn’t a good option because it would be “enormously dilutive,” Molchanov said.

Suntech’s American depositary receipts, down 59 percent this year, fell 1 percent to 91 cents at the close in New York yesterday. Each ADR is worth one ordinary share.

Suntech’s efforts will help the company “return to a sustainable and profitable business model,” Chief Executive Officer David King said in the statement.

Paying Debt

Suntech’s statement is one of the “more hollow” ones from a solar manufacturer and “glossed over” its most pressing issues. Aaron Chew, analyst at Maxim Group LLC in New York, said in an interview. “They don’t know how to pay off their debt.”

Suntech is also reducing its production capacity, a step other solar manufacturers should emulate, Amir Rozwadowski, an analyst at Barclays Plc’s investment banking unit in New York, said in a research note yesterday. “Current industry dynamics are simply not sustainable,” he said, and “right-sizing” is needed to “rectify the industry’s supply-demand imbalance.”

Suntech spokesmen didn’t reply to e-mailed inquiries yesterday.

Copyright 2012 Bloomberg.

Image: Mountain of Money via Shutterstock

 

RELATED ARTICLES

Clock sky

German Utility's Race for Renewables Seen as Too Little, Too Late

Tino Andresen, Bloomberg

RWE AG, the German utility whose coal-fired plants make it Europe’s largest carbon emitter, officially started the company’s largest renewables project on Thursday: a wind farm in Liverpool Bay off Britain’s coast.

money pile

Deeper Capital Markets for Renewable Energy

Tomas Gardfors and Ann Vesely, Norton Rose Fulbright Following the global financial crisis, a more diversified funding market is developing in Europe. Institutional investors are helping to fill the funding gap left by the contraction in bank lending in the wake of the crisi...
Vatican City

Where Coal Was King, Pope's Climate Warning Faces a Tricky Sell

Alex Nussbaum and Tim Loh, Bloomberg

In West Virginia, where workers have harvested coal seams for centuries, Pope Francis’ new warning about the risks of fossil fuels will find skepticism even among the faithful.

Clean planet

Renewable Energy Responsible for First Ever Carbon Emissions Stabilization

Vince Font, Contributing Editor Carbon emissions in 2014 remained at the previous year’s levels of 32.3 billion metric tons — a milestone that points to the impact worldwide renewable energy investment is having in the face of a 1.5 percent annual increa...

CURRENT MAGAZINE ISSUE

Volume 18, Issue 3
1505REW_C11

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

FEATURED PARTNERS



EVENTS

SAP for Utilities

The SAP for Utilities conference is the most comprehensive SAP for Utili...

ImagineSolar | Advanced Lab Day: Solar PV Design & Installation (Au...

Advanced Lab Day: System Design & Installation  $195 – 8 ...

ImagineSolar | Advanced Online: Solar PV System Design & NABCEP Exa...

Advanced Online Solar PV System Design & NABCEP Exam Prep $695 &ndas...

COMPANY BLOGS

8 Bad Habits Of Communication

Effective communication is essential in building rapport and closing sal...

The Almost There Markets: Just Give ‘Em Some Time

Earlier this year, we reported on recent legalization of third party fin...

Install Video [Tile Flashing System]: It Doesn’t Get Much Easier Th...

Looking for a fast, easy install on tile roofing?  Give our Ti...

SOCIAL ACTIVITY

Tweet the Editors! @megcichon @jennrunyon

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS