In a sign that a Chinese government takeover of embattled solar panel maker Suntech may be imminent, the company today announced it has appointed an executive from a state-owned holding company as its president. He is Weiping Zhou, who most recently served as chairman of Guolian Futures, a unit of Wuxi Guolian Development Group, a local government-owned conglomerate. The board also appointed a new director, Philip Fan, an industrial developer.
The move comes days after Suntech, which was the world’s largest maker of solar panels, defaulted on a $541 million payment on convertible notes and follows the board’s firing earlier this month of company founder Zhengrong Shi.
Suntech, which faces $2 billion in debt, has not released financial statements since last year. As of Tuesday evening, Suntech had a market cap of $106 million and its American depository shares were trading at 59 cents after hours.
“As president of Suntech, Mr. Zhou will manage business operations and work with Mr. David King, Suntech’s CEO, and the board to define the strategic direction of the company,” Suntech said in a statement Tuesday.
The question now is whether a government takeover of Suntech would result in the company’s restructuring to keep one of China’s few global brands alive, or whether Suntech will be shut down to shrink the overcapacity among Chinese manufacturers that has sent solar panel prices plummeting. The rapid expansion of manufacturing capacity in recent years has left Yingli, Trina and other major Chinese solar companies with heavy debt loads and note payments due in the coming months.