• 3 minutes Oil Price Could Fall To $30 If Global Deal Not Extended
  • 8 minutes Why Is America (Texas) Burning Millions of Dollars Per Day Of Natural Gas?
  • 11 minutes Is $60/Bbl WTI still considered a break even for Shale Oil
  • 15 minutes CNN:America's oil boom will break more records this year. OPEC is stuck in retreat
  • 42 mins The Pope: "Climate change ... doomsday predictions can no longer be met with irony or disdain."
  • 21 hours Hormuz and surrounding waters: Energy Threats to the World: Oil, LNG, shipping markets digest new risks after Strait of Hormuz attack
  • 1 day As Iran Nuclear Deal Flounders, France Turns To Saudi For Oil
  • 21 hours The Magic and Wonders of US Shale Supply: Keeping energy price shock minimised: US oil supply keeping lid on prices despite global risks: IEA chief
  • 1 hour Middle East on brink: Oil tankers attacked off Oman
  • 7 hours Russia removes special military forces from Venezuela . . . . Maduro gone by September ? . . . Oil starts to flow ? Think so . .
  • 24 hours Never Knew Gasoline Prices were this important!
  • 12 hours Plants are Dying
  • 23 hours (Un)expectedly: UK Court Sets Assange U.S. Extradition Hearing For February 2020
  • 4 hours The Latest: Iranian FM Says US Cannot Expect To ‘Stay Safe’
  • 18 hours We Are Better Than This
  • 7 hours Emmissions up, renewables nowhere
  • 2 days Britain makes it almost 12 days with NO COAL
Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Trending Discussions

Suntech Solar Reels as Directors Quit Over Cash Flow

Giant Chinese solar manufacturer Suntech Power has seen three of its directors quit this month in frustration over what they say is the lack of clear strategy after the company went bankrupt earlier this year.

On 21 August, directors Susan Wang, Julian Worley and Zhizhong Qui tendered their resignations.

The former directors said in a shared statement that they were concerned about the company’s negotiations with bondholders, cash flow and the lack of a clear business plan. They also cited concern about the potential erosion of internal controls that was making it difficult for employees to function effectively, according to the South China Morning Post.

Related article: Germany Proves Sunshine is not Necessary for a Booming Solar Industry

Those directors who have remained at Suntech issued their own statement, saying that the concerns are "demonstrative of disharmony and issues of communication between the executive management and the resigning directors that decreased the efficiency of the board's decision-making process.”

The bottom line is that there has been a severe cash-flow drain and the directors are frustrated at the company’s rejection of their advice on how to move forward. This is compounded by the fact that the directors’ feel there is no clear plan in place for generating new capital.

Suntech shares plunged 7.3% Wednesday and have lost 34% this year in total.

After filing for bankruptcy earlier this year, Suntech rallied a bit in April on rumors that Warren Buffett might buy the company. According to Bloomberg, after falling 40% following the default, Suntech rose as much as 28% in early April after a Hong Kong news service said Buffet’s MidAmerican Energy Holdings Co. might buy the Chinese manufacturer.

Chinese lenders signed a bankruptcy petition for Suntech over the company’s debt in excess of $2.2 billion. Suntech continues to produce solar panels, however, further compounding the oversupply problem and forcing more drops in prices.

Related article: US Energy Department Claims the Cost of Solar Power will Fall 75% by 2020

Solar stocks are extremely volatile right now and unable to deal with the combination of oversupply and declining demand at a time when government subsidies are being slashed.

As of the end of this first quarter of last year, Suntech Power had total debt of $2.2 billion, including the convertible bond, loans from China Development Bank, and a $50 million convertible loan from the International Finance Corporation, according to Reuters.

Suntech reached a deal in June to push its bond repayment deadline to 30 Aug.

Right now, the company is operating at 30-40% manufacturing capacity and could ostensibly service its debt with its operating cash flows, according to some analysts. But it looks like it will have to get rid of some assets. In May, there was talk of selling one of its China-based solar projects for around $15 million—32% lower than its market value.

By. Charles Kennedy of Oilprice.com




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment





Oilprice - The No. 1 Source for Oil & Energy News