One of the world’s largest makers of solar panels, Suntech Power, has nearly run out of cash and is poised to be taken over partially or entirely by the municipal government’s holding company in its hometown of Wuxi, China, solar industry executives and a Wuxi official said Wednesday.
A woman answering the phone in the executive offices of the group headquarters of Wuxi Guolian, the holding company, said a deal had already been reached for the acquisition of Suntech, which is traded on the New York Stock Exchange. The woman declined to identify herself.
Rory Macpherson, Suntech’s director of investor relations, declined to address a question about Wuxi Guolian, saying in an e-mail: ‘‘It’s our policy not to comment on market rumors.’’
Suntech has been driven to the financial brink by an obligation to pay more than $541 million to holders of convertible bonds at the end of this week. It stopped releasing financial reports last year after disclosing in July that it had invested in $690 million worth of German bonds that might prove fraudulent. The company’s cash reserves have been dwindling, according to analysts, and Chinese state-owned banks have become reluctant in recent months to keep extending loans.
The company said it reached a deal with three-fifths of the bondholders early this week to give it a two-month reprieve to find an answer to its financial troubles, but some bondholders have questioned the announcement, saying they were not even approached about a reprieve.
The collapse of Suntech is a milestone in the precipitous decline of China’s green energy industry over the past four years. More than any other country, China had bet heavily on renewable energy as the answer to its interlinked problems of severe air pollution and heavy dependence on energy imports from politically unstable countries in the Middle East and Africa.
But China’s approach to renewable energy has proved ruinous, both financially and in terms of trade relations with the United States and the European Union.
State-owned banks have provided $18 billion in loans on easy terms to Chinese solar panel manufacturers, financing an increase of more than tenfold in production capacity from 2008 to 2012. This set off a 75 percent drop in panel prices over the same period, which resulted in Chinese companies’ losing as much as $1 for every $3 in sales last year.