Suntech receives $150 million letter of intent

Wuxi Guolian Development Group has provided an investment letter of intent to the financially troubled Suntech Power Holdings Co. to make a $150 million investment in the company.

The move is seen as part of a comprehensive rehabilitation and restructuring plan for Suntech, which saw its core business unit go belly up this year. If the companies agree on the plan, Guolian could combine its business units with Suntech or form joint ventures between its subsidiaries and the company in an effort to take advantage of its global platform, distribution networks and other synergies.

Suntech CEO Zhou Weiping said, "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."

Weiping added that while there will be substantial dilution for existing shareholders, the successful implementation of these efforts would preserve the company’s international platform, rebuild its operating assets and rehabilitate the Suntech global brand.

Suntech, the world’s biggest solar-panel maker by 2011 shipments, filed for bankruptcy in March after missing a $541 million bond payment. The group had more than 20,000 employees at its peak in 2010.

Guolian is an investment company based in Wuxi, Jiangsu Province, China, with primary investments in finance and industry. The group’s total assets at the end of 2012 amounted to $6.7 billion.

Guolian had previously sought to buy Wuxi Suntech Power Co., Suntech’s principal operating subsidiary in China currently in administration. Jiangsu Shunfeng Photovoltaic Technology Co. ultimately won the bid for the unit on Oct. 8.