BEIJING (AP) — Suntech, one of the world's biggest solar panel manufacturers, was forced into bankruptcy court Wednesday, becoming the latest casualty of a painful slump in the global solar industry.
Suntech Power Holdings Ltd. said eight Chinese banks asked a court to declare it insolvent after the company missed a $541 million payment to bondholders last week. Suntech said it would not oppose the petition.
The development is a dramatic reversal for a company that was a leading force in China's fast-growing renewable energy industry. Its founder, Shi Zhengrong, has seen much of his multibillion-dollar fortune evaporate.
"While we evaluate restructuring initiatives and strategic alternatives, we are committed to continuing to provide high-quality solar products to our global customer base," Suntech CEO David King said in a statement. "During this period, we will continue to work closely with all of our stakeholders and take the necessary steps to put Suntech back on track for growth."
Solar panel makers have suffered huge losses over the past year after rapidly growing production capacity outstripped demand and prices plunged. Another industry giant, Germany's Q-Cells, filed for bankruptcy last April.
Suntech, headquartered in the eastern city of Wuxi, west of Shanghai, has also been hurt by a revelation in July that a business partner faked $680 million in collateral for a loan Suntech had guaranteed.
On Monday, the company said it was looking for new financing and was negotiating with creditors in hopes of restructuring its debt.
The company had said owners of 60 percent of the bonds agreed last week not to exercise their rights under the notes until May 15. But it said the bonds' trustee declared a default, which triggered defaults on other debts owed to Chinese lenders and the International Finance Corp.
Shi, who has a Ph.D. in physics, founded Suntech in 2001. He had gone to Australia in 1988 and got into solar power by chance when he needed a job after a university fellowship ended.
Shi, who had become an Australian citizen, was lured back by officials in Wuxi who wanted to develop high-tech industry and put up $6 million to start Suntech. Shi later bought out his state backers with help from a group led by Goldman Sachs and went public on the New York Stock Exchange in 2005.