Warren Buffett seeks to buy bankrupt Chinese solar panel maker Suntech Power Holdings

Shares in China's struggling Suntech Power Holdings Co surged early this week after a news service owned by Hong Kong reported that billionaire Warren Buffett will acquire the world's largest solar panel maker.

Suntech share price jumped as much as 16 per cent on 8 April, after the report said that Buffett's MidAmerican Energy Holdings Co may buy the solar panel maker.

Suntech, whose stock reached a record high at $88.35 in December 2007 and closed yesterday at 87 cents, denied the content of the report, saying that the proposed acquisition was only a rumour.

After defaulting on a $541-million bond repayment, New York-listed Suntech on 18 March forced its main subsidiary Wuxi Suntech to file for bankruptcy, a move that sent shockwaves across the global alternate energy industry as it became the solar industry's biggest corporate failure.

The Wuxi Municipal Intermediate People's Court in Jiangsu Province has appointed administrators to run the company and manage the restructuring process.

Citing an insider in the Wuxi government, National Business News had earlier said that a restructuring plan for Wuxi Suntech is expected within six to nine months and several strategic investors have shown interest in the company.

Wuxi-based Suntech was founded in 2001 by Shi Zhengrong, who went on to become the world's only solar billionaire.

Funded by the Chinese government and its banks, Suntech soon grabbed the global solar panel market with cheap products by dethroning the then heav weights in the photovoltaic industry led by Germany, Japan and the US.

But extremely high raw material and manufacturing costs, overcapacity, a deteriorating global market, and governments withdrawing their financial backing, has led to many solar panel manufacturers in Germany, the US, Japan and China to go bust.

Last year more than 1,000 solar companies went bankrupt, including two of world's largest, Solyndra of the US and Q-Cells of Germany.

Buffett is already a huge investor in renewable energy through his utility, MidAmerican, a subsidiary of his investment arm Berkshire Hathaway.

He recently acquired Antelope Valley Solar Projects in California. He also holds a 49 per cent stake in the 290 MW Agua Caliente solar project in Arizona, and a 550 MW photovoltaic Topaz Solar farm in California.