Suntech gets investment letter of intent from Wuxi Guolian Development

By Caroline Salls

Pittsburgh, Oct. 30 - Suntech Power Holdings Co., Ltd. received a letter of intent under which Wuxi Guolian Development (Group) Co., Ltd. would make an equity investment of not less than $150 million in cash into Suntech in connection with supporting a comprehensive rehabilitation and restructuring of the company's financial and operational affairs, according to a Suntech news release.

In addition, Wuxi Guolian would cause related solar and other businesses it owns to be injected into Suntech and/or enter into joint venture or similar arrangements with the company to take advantage of its global platform, distribution networks and other synergies.

"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," Suntech chief executive officer Zhou Weiping said in the release.

"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."

According to the release, Wuxi Guolian had previously participated in the competitive bidding process for Suntech's principal operating subsidiary in China, Wuxi Suntech Power Co., Ltd., which is currently in administration.

The company said Jiangsu Shunfeng Photovoltaic Technology Co., Ltd. was provisionally selected as the strategic investor of Wuxi Suntech on Oct. 8 and signed a strategic cooperation agreement with Wuxi Suntech on Oct. 24.

Suntech said strategic investor Jiangsu will be officially selected pending approval during a second creditor's meeting of Wuxi Suntech scheduled for Nov. 12 and then final confirmation by the Wuxi Intermediate People's Court.

Wuxi Guolian's investment letter of intent refers to a potential investment in Suntech Power Holdings Co. Ltd.

Wuxi Guolian is an investment company based in Wuxi, China, with primary investments in finance and industry.

An involuntary Chapter 7 bankruptcy case was filed against Suntech, a Wuxi, China-based global manufacturer and distributor of solar panels, on Oct. 14 in the U.S. Bankruptcy Court for the Southern District of New York. The Chapter 7 case number is 13-13350.

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