Solar module manufacturer Suntech Power Holdings (STP), once solar’s champion, is in bankruptcy court, has been delisted by the New York Stock Exchange, and is accused of fraud.
Founded by Chinese solar research scientist Zhengrong Shi, Suntech’s 2005 NYSE IPO was the first for a privately owned Chinese company. By 2008, Suntech was solar’s rising star. When the oversupplied solar module market consolidated in 2009-2010, Suntech was overleveraged. Things went south in 2011-2012. By 2013, Suntech was bankrupt and its OTC stock price dropped below $1.00.
Here are the highlights of Suntech's ride.
2001
Founded in Wuxi, China
2005
December: NYSE IPO
2005 financial report: Net revenues up 165.0 percent over 2004 to $226.0 million, net income $30.6 million
Production capacity 150 megawatts
2007
Shi named a TIME magazine "Hero of the Environment" and China’s “Green Person of the Year"
2007 financial report: Total shipments 364 megawatts, total net revenues up 125.1 percent year-over-year to $1,348.3 million, non-GAAP gross margin in the core wafer-to-module business 23.6 percent
PV cell production capacity up to 540 megawatts
2008
Named Frost & Sullivan’s solar energy developer of the year
June: First investment in Italy-based Global Solar Fund (GSF) to expand project development in Europe
October: Formed Gemini Solar Development with MMA Renewable Ventures, acquired integrator EI Solutions, and expanded U.S. dealer network
December: 1 gigawatt production capacity
2008 financial report: Total net revenues up 42.7 percent year-over-year to $1,923.5 million, total solar product shipments up 36.0 percent year-over-year to 497.5 megawatts, non-GAAP gross margin 18.2 percent
2009
May: Public offering of 20,000,000 American Depositary Shares at $12.50 per share
September: New world record 16.53 percent multicrystalline silicon module efficiency
September: Completed China’s first utility-scale solar PV project
2009 financial report: Total net revenues were $1,693.3 million, total shipments up 42 percent year-over-year to 704 megawatts, consolidated gross profit margin 20 percent
Production capacity up to 1.1 gigawatts
2010
May: Guaranteed 550 million euro loan from China Development Bank for EU development with GSF Capital’s 560 million euros in German government bonds as collateral
October: Opened 50-megawatt-capacity Arizona module manufacturing plant
2010 financial report: Total net revenues $2,901.9 million, up 71.4 percent year-over-year, total PV shipments 1,572 megawatts, up 124.5 percent year-over-year, consolidated gross profit margin 17.4 percent
PV cell and module production capacity 1.8 gigawatts
Suntech’s 2010 margins, Seeking Alpha noted in December, were inching downward, suggesting it was “losing out to competition and engaging in a race to the bottom on prices.”
2011
March: 2-gigawatt annual module production capacity
October: Cumulative 5 gigawatt installed capacity
2011 financial report: Shi said Suntech was “the world's leading supplier of solar modules for the second year running.” Total net revenues $3,146.6 million, total PV shipments 2,096 megawatts, up 33.3 percent year-over-year, gross profit margin 12.3 percent
PV cell and module production capacity to 2.4 gigawatts
“Fourth-quarter revenue decreased by 33 percent year-over-year to $629 million,” CFO David King said, noting a Q4 2011 net loss of $137 million against a net income of $358 million in Q4 2010.
2012
Preliminary 2012 financial report: Shipped ~1.7 gigawatts to 1.8 gigawatts of PV products, below the predicted 1.8 gigawatts to 2.0 gigawatts, revenues ~$1,625 million, down 48 percent year-over-year, gross margin ~negative 1.4 percent
July: 560 million euros in German government bonds used to back GSF European solar projects revealed as forgeries, leaving Suntech, 88 percent owner of GSF, with more debt
Suntech share price down 40 percent
2013
March: Shi dismissed by Suntech’s Board, his estimated 2008 net worth of over $2 billion now “around $31 million”
Bankruptcy, debt repayment plan, GSF settlement without loss recovery, Arizona plant closure, debt default
November: Shares delisted from NYSE
Fight for control of Suntech between Wuxi Guolian, representing headquarters’ hometown, and Shunfeng Photovoltaic, the bankruptcy court’s reorganization choice. Shunfeng bid $492 million. Wuxi promised $150 million in cash to guarantee that the company’s plants and jobs will stay in Wuxi. The Chinese bankruptcy court turned Suntech over to Shunfeng for restructuring, according to PV Tech.
Ongoing bankruptcy struggles outside China involving U.S. stockholders and corporate bondholders, according to Financial Times.
"It is far too early to comment on Suntech's prospects," noted GTM Research Solar Market Senior Analyst Shyam Mehta. "But its brand, bankability and standing in the industry have taken a severe beating over the course of the past six months."
