Wednesday, August 1, 2012

Suntech Power Holdings (NYSE:STP) May Have to Turn to China For Funding

Suntech Power Holdings Co., Ltd’s (ADR)(NYSE:STP)  funding needs, to clear its $541 million debt, are unlikely to be met by Wall Street, Bloomberg reported on Wednesday citing analysts.

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U.S. investors have lost confidence in the world’s largest solar company after it said it hadn’t verified the existence of 560 million euros ($689 million) in German bonds, the news agency quoted Aaron Chew, an analyst at Maxim Group LLC in New York.

Chew lowered his 12-month price target for Suntech to zero from 50 cents, it said.

Suntech shelved plans to raise funds through a stake sale in a European solar developer, following questions about the bonds, and the only way for the company to avoid bankruptcy would be to ask for a bailout from the Chinese government.

With no hope of getting anyone to buy its stock on Wall Street, the company may have no alternative other than to turn to its own government, who could orchestrate a buyout by some private enterprise, Chew told Bloomberg.

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The company’s total short-term debt at the end of last year was $1.6 billion and its long-term debt was $149 million, according to its 2011 annual report. Its principal on convertible notes due next year was $541 million.

Shares of STP slumped 14.16% to $0.97 and made an all-time low of $0.81 earlier in the session on heavy trading.

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