Suntech may sell GSF stake17. April 2013 | Industry & Suppliers, Investor news | By: Becky Beetz
According to reports, Suntech Power Holdings Co. Ltd may sell its stake in the Global Solar Fund Sicar (GSF Sicar), in a bid to reduce its over US$2 billion debt mountain.
Suntech has said it could sell its stake in GSF Sicar, reports Reuters. A spokesperson for the Chinese photovoltaic manufacturer reportedly stated, "We intend to operate GSF for the time being and will consider all options to maximize the value for our stakeholders." They added that investors would be updated in the coming months.
According to analysts, the fund carries an enterprise value of up to $800 million, says Reuters. However, even if it did sell its stake, it would not be enough to cover the ailing company’s $2 billion debt pile. "I put a big question mark on whether Suntech can sell off its stake in GSF soon," Glenn Gu of IHS told the news agency. "It will not be a surprise if the stake in GSF is sold at a big discount at the end of the day."
In an investor note issued in March, U.S.-based Maxim Group said, "Though GSF has been held up as a beacon of hope for desperately-needed liquidity, we believe the vast majority of its 141 MW are effectively toxic assets that will be virtually impossible to sell given (a) a number of project LLCs under criminal investigation and associated with the local mafia and (b) reports from our contacts in Italy of many projects half-complete and raided."
At the start of March, Suntech announced it had reached a settlement regarding its fraud dispute with GSF Capital Pte Limited (GSF Capital). A part of the agreement saw its equity interest in the fund increasing from 79.3% to 88.15%. The remaining 11.85% belongs to Best (Regent) Asia Group Ltd., a company said to be ultimately held by Zhengrong Shi, Suntech founder, and former CEO and chairman.
Meanwhile, Wuxi Suntech Power Co. Ltd was forced to file for bankruptcy last month after parent company, Suntech defaulted on a $541 million bond repayment.
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