These are dark days at Suntech Power Holdings, once the poster child for the expansion of China’s solar industry. In 2011, Suntech shipped about 2.1 gigawatts, making it one of the biggest players in the sector. But a cyclical downturn that hammered demand and prices has put the firm into bankruptcy proceedings.
As Suntech’s foreign bondholders scramble for repayment, China’s solar sector is dividing into two camps. Suntech and other highly indebted firms are shrouded in darkness. LDK Solar has been in the red for six quarters and has net debt of $2.7 billion. Those basking in sunlight are low-cost producers and firms with healthier balance sheets that stand to benefit from the potential demise of a major producer. Shares in Yingli Green Energy and Trina Solar rose 8.6% and 6.4% respectively Wednesday.
It is easy to see why investors are in a sunnier mood. Consolidation in the industry would help ease overcapacity. Beijing’s recent announcement of plans to add a massive 10 gigawatts to China’s installed capacity in 2013 is also a boon.
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Tom Orlik, Wall Street Journal via CHINA US Focus http://feedproxy.google.com/~r/ChinaUsFocus/~3/bIj4AnkBjUg/
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