Suntech, one of China’s best-known global brands, is abandoning the technology that once made it the world’s largest solar manufacturer.
The company’s chairman stated in a court filing that the bankrupt company plans to idle its factories and transform itself into a distributor of solar panels once its Chinese operations emerge from bankruptcy, according to a report in the Wall Street Journal. The move comes as Suntech said today in a regulatory filing that it has filed for liquidation in the Cayman Islands, where the debt-ridden company is registered.
“Once [restructuring] is complete,” Suntech spokesman Ryan Ulrich told Quartz, “then Suntech will be in a better position to discuss its future business plans.”
The move seemed inevitable, given reports that a smaller Chinese solar company, Shunfeng Photovoltaic International, last week had acquired most Suntech’s factories for nearly $493 million. A Chinese state-owned conglomerate, the Wuxi Guolian Development Group, meanwhile, pledged, to invest $150 million into Suntech to finance “a comprehensive rehabilitation and restructuring of the financial and operational affairs” of the company, according to a regulatory filing. A former Wuxi Guolian official, Zhou Weiping, is Suntech’s current chief executive.
Suntech’s fall has been even swifter than its rise from a startup founded in 2001 by an Australian-trained photovoltaic scientist named Zhengrong Shi. Briefly China’s richest man, Shi rapidly expanded production of solar panels, and as his competitors followed suit the price of photovoltaic modules plummeted. That triggered a worldwide solar building boom as homeowners, businesses and utilities took advantage of cheap solar but left Suntech saddled with more than $2 billion in debt and falling revenues. A scandal involving a European joint venture owned by Suntech and Shi sealed the company’s fate in April when it triggered a default on $541 million in bonds.
Whatever form Suntech takes once it emerges from bankruptcy, it will be a much smaller company. But it’s difficult to imagine Suntech surviving as distributor of other company’s products. Suntech’s former rivals, including Yingli—now the world’s largest photovoltaic manufacturer—have long-standing relationships with their own distributors.