Ousted Suntech boss says there are no plans to cover debt
Shi Zhengrong, the ousted chairman of Suntech Power Holdings, said he was “shocked” by the board’s “misconceived and unlawful” decision to remove him and that he’s been excluded from meetings for the past month.
The founder of what was the world’s biggest solar panel maker also said that the solar manufacturer’s board has no plans for refinancing USD541 million of convertible bonds due on March 15.
“The problem is they don’t have a solution. They need a viable business plan. They need to talk to all the bondholders and suppliers and government. All the stakeholders want to talk to me. All the bank CEOs want to talk to me. They want to know why Dr. Shi didn’t show up,” said Shi.
The founder’s comments indicate divisions within the Chinese company’s management about how to recover from an accounting scandal and plunging solar cell prices, that has caused two years of massive losses for Suntech.
In July it said it was investigating fraud involving a 554.2 million euro (USD680 million) financing guarantee it made involving German bonds that may have never existed. And in December the company cut its forecasts for solar shipments in 2012 to between 1.8-GW and 2-GW, effectively ceding its market leadership position to Yingli Green Energy.
Suntech hired UBS AG last year to review options about how to refinance the bonds due this month and have been in talks with bondholders about a solution. The company also is seeking financial support from the local government in Wuxi, the Chinese province outside Shanghai where it’s based.
“Our best guess is that Suntech is preparing for ceding control to a third party,” said Nitin Kumar, an analyst at Nomura Singapore. “Management change at Suntech was sorely needed given the execution missteps over the last five to six years.”Suntech, which named Susan Wang to replace Shi as chairwoman of the board, hasn’t reported a profit since the first quarter of 2011. In the last three months, its shares have risen 41 percent in New York trading on increased confidence in the manufacturer and its peers.