The company that was the world's largest manufacturer of solar panels has gone bust.
China's Suntech Power, a New York Stock Exchange traded company, "on Wednesday declared bankruptcy reorganization," China's state-owned Xinhua News Agency reported.
An article by Agence France-Presse (AFP) in the South China Morning Post elaborates that Suntech,
"has been badly hit by oversupply in the global market for solar cells and panels, as well as trade disputes with the United States and Europe over alleged Chinese dumping and government subsidies to producers. Chinese firms, including Suntech, have denied the claims."
Profits in the solar industry have been generally hard to come by. Worsening matters for Chinese solar exporters, the U.S. recently increased import tariffs on their goods.
As SmartPlanet's Kirsten Korosec reported, Suntech recently closed a factory in Arizona. On Monday Suntech said it defaulted on a $541 million bond payment. China has also considered cutting subsidies to solar companies, which would make it more difficult for them to sell at low cost.
“The government clearly has intervened and wants to reorganise the company and maintain production,” Liu Wenping, a partner at Shanghai-based solar investment consulting firm Sapphire Capital told AFP.
Suntech's board ousted company founder Shi Zhengrong as chairman earlier this month, in a move Shi called "unlawful." One source said Shi has government support and could return in the reorganization, AFP noted.
Photo from Suntech
The signs were there: