Bankrupt Chinese solar firm Suntech to sell Wuxi Suntech to Shunfeng

China's bankrupt solar company Suntech Power Holdings Co yesterday struck a deal to sell its core assets in China to its Hong Kong-listed rival Shunfeng Photovoltaic International Ltd for 3 billion yuan ($492 million).

Suntech, once the world's largest solar-panel maker by capacity, will sell its main subsidiary Wuxi Suntech Power Co, which designs, develops, manufactures and markets a range of PV cells and modules, including a range of value-added building-integrated photovoltaics products.

The company sells its products in Germany, Italy, Spain, France, Benelux, Greece, the US, Canada, China, the Middle East, Australia and Japan.

It has solar panel manufacturing capacity of more than two gigawatts, intellectual property and a research and development unit.

The administrators of Suntech found Shunfeng's bid superior to that of state-owned Wuxi Guolian Development Co - the development arm of the city of Wuxi.

After defaulting on a $541-million bond repayment, on 18 March New York-listed Suntech 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 had appointed administrators to run the company and manage the restructuring process.

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 heavyweights in the photovoltaic industry from Germany, Japan and the US.

But extremely high raw material and manufacturing costs, overcapacity, a deteriorating global market, and governments withdrawing their financial backing, 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.

Shunfeng, part owned by Cheng Kin Ming, has paid a 500 million yuan ($82 million)  deposit to buy Wuxi Suntech and would pay an additional 2.5 billion yuan (410 million) within a month after the deal is approved by Shunfeng's shareholders and Wuxi Municipal Intermediate People's Court.

Shunfeng will also absorb Wuxi Suntech's losses of up to 20 million yuan a month between 20 March and 31 October and fund the upgradation of Wuxi Suntech's facilities within two years.