Dallas, Texas 10/16/2013 (Financialstrend) – Suntech Power Holdings Co., Ltd. (ADR) (NYSE:STP) is a diversified electronics and equipment manufacturer. It has a market cap of $249 million with accumulated debt of $2.3 billion. Over the past 12 months trailing period, the company had posted sales of $2.6 billion. During operations of its second quarter which ended on June 30, it had recorded a steep 53% drop in its sales on a quarter on quarter compare. Many analysts had opined that if the financial turmoil the solar equipment manufacturer is facing deteriorates any further then the Chinese government would be forced to intercede and bail out the company.
So far the Chinese government has not obliged the company or the analysts. It is in this context that one needs to consider news that started emerging on October 15 that U.S. bondholders of Suntech had filed suit in a New York court requesting the courts intervention in compelling the solar power equipment manufacturer into involuntary bankruptcy. The financial turmoil has increased due to the sudden drop in prices of solar panels. Worst fears of investors had multiplied when Suntech defaulted on $500 million notes redemption in early March this year. This in turn led to its China bases subsidiary to file for bankruptcy protection in China.
In what seems to be a deepening of financial trouble for STP, it was reported on October 14, that solar fields developed by the firm in Italy have been confiscated under the directions of a court order. STP had developed this farm in Italy through the backing of Global Solar Fund. The solar farm has a peak production capacity of 37.8 million watts of power.
The shares of Suntech Power were trading at $1.38 per share up 2.99% from its previous day close as of October 15. Over the past week the stock has shed close to 18.8% during trading last week.