China's Suntech Power in $541m debt default
- 19 March 2013
- From the section Business
China's Suntech Power Holdings, the world's biggest solar panel maker, has defaulted on its debt.
The firm said it had failed to repay $541m (£360m) worth of bonds due on 15 March. That triggered cross-default clauses on its other loans as well.
The failure to make payments on the bonds could lead to potential lawsuits against Suntech.
However, the firm said it was in talks with the bondholders and was unaware of any legal proceedings being initiated.
"It is currently a very difficult time for our company and our industry, but the management and board of Suntech are committed to finding a way forward," David King, chief executive of Suntech, said in a statement.
"We are currently exploring strategic alternatives with lenders and potential investors, which could help to set us on a path towards longer term success."
The firm has outstanding loans from International Finance Corporation as well as Chinese domestic lenders.
Suntech, which emerged as a leader in China's green energy sector, has seen its fortunes plummet in recent times.
It posted four consecutive quarters of losses through the first quarter of 2012. The firm has not released its quarterly earnings since then.
Global solar panel makers such as Suntech have been hurt by a sharp decline in prices in recent years.
However, US and European panel makers have blamed Chinese firms for playing a big role in that.
They have accused the Chinese companies of flooding the market and of selling the panels below fair price, a practice known as "dumping".
There have also been allegations that China provides subsidies to its firm, which helps them keep their costs low and as a result sell goods at a cheaper prices.
Last year, the US authorities sharply raised the tariffs on solar cells imported from China, which they said were aimed at offsetting those subsidies.
The European Commission also opened an investigation into subsidies given to Chinese solar panel makers, which it said had hurt European firms.
The commission estimated that Chinese firms sold about 21bn euros ($27bn; £17bn) of solar panels and accompanying components to the European Union in 2011.
However, China has denied these allegations.