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.