Four companies bid for Suntech

Since Suntech announced its bankruptcy and restructuring, it has finally made new progress.

On August 14, the Wuxi Municipal Government Information Office stated to the public that recently the bankruptcy reorganization management team confirmed that the Wuxi Suntech clearing fund has basically come to an end. Since July, it has entered the stage of selecting strategic investors. According to the reporter’s understanding, there were four short-listed strategic investors, namely Trina Solar, Yingli Group, China Xidian, and Beijing Putian New Energy. At present, strategic investors are conducting due diligence on Wuxi Suntech.

At present, none of the above four companies have expressed their position. However, according to the reporter's understanding, the current plan is to select one of the four options. A winning company will hold Wuxi Suntech, while the Wuxi League of Nations and Shi Zhengrong team will only participate. In accordance with legal procedures, Wuxi Suntech’s bankruptcy and reorganization will continue for six months and will be extended by the court for three months. This means that before the end of 2013, the fate of Suntech’s Wuxi will come to an end.

In addition to the four bids, except Tianhe Solar and Yingli Group, which are the first-tier manufacturers in the photovoltaic industry, China Xidian and Beijing Putian New Energy are all new entrants in the industry.

Suntech's strategic investor recruitment work has started since June.

According to the reporter’s understanding, the Bankruptcy Restructuring Managers’ Group once publicly recruited strategic investors by sending letters. They initially contacted five companies, including three private enterprises and two state-owned enterprises, and it was only in the second round that these four companies were finalists. A person from Suntech Wuxi stated that he will select one of the above four companies to join the Wuxi League of Nations and Shi Zhengrong team to manage the new Wuxi Suntech. "However, Wuxi Guolian will not be in a controlling shareholder status, and Shi Zhengrong will also become a minority shareholder."

Except for Trina Solar and Yingli Group, which are first-tier manufacturers in the photovoltaic industry, China West Power and Beijing Putian New Energy are all new entrants to the industry. Both have the same state-owned assets background. The industry believes that The state-owned company wants to take over Wuxi Suntech intends to expand the production capacity of the photovoltaic industry, and the private enterprises to snatch food.

A Suntech creditor of Wuxi told reporters that four strategic investors value Suntech. On the one hand, Suntech has a capacity of 2.4 GW. After the acquisition, the market can rapidly expand its share in the market by the end of next year. On the other hand, after negotiating with the EU, the EU will implement a quota system in addition to the price limit for Chinese PV companies. It is reported that the EU’s proposed import limit is 7 GW, and there is no taxation or undercollection within 7 GW. The 7-kilowatt portion is levied according to relevant regulations. "It is said that Suntech's share of Wuxi will exceed 500 megawatts, which also makes bidders value it."

"Unlike other acquirers, whoever acquires Wuxi Suntech will not let this brand die out. The buyer should implement a dual-brand strategy because it still has a certain influence in the world. For example, before Suntech was in the United States. Once occupied 20% of the market share, and in Australia it is also a high-end brand, the price is 5% to 10% higher than their peers, profits are abundant." The above said.

"Now Wuxi Suntech's situation is improving." A Wuxi Suntech person told reporters that he said that after the reduction of production in March, the current production line is basically running at full capacity, in which Zhenjiang, Luoyang, Shanghai and other subsidiaries also began to take the initiative Going to the market, looking for new orders, nowadays, Shanghai and other subsidiaries have begun to make a slight profit. The first-line core staff did not lose, and now each month's output is 60 trillion to 80 megawatts, and the annual shipment is around 1 GW, half of which is in the domestic market.

“The key is that Wuxi Suntech has 2.4 GW of capacity. No matter who is Trina Solar or Yingli Group, whoever acquires it will become the world's largest producer of photovoltaic cells and modules,” the source said.

In addition to production improvement, Suntech's debt problem has also been relatively reduced. At present, Wuxi Suntech’s claims reporting, auditing, and asset auditing and evaluation work have all ended, and the production and verification of nuclear assets have also come to an end. According to the bankruptcy reorganization manager’s group, it has confirmed that the company’s debts to creditors such as banks and suppliers are approximately The amount of RMB 10.7 billion has been substantially reduced from the RMB 17.4 billion that was reported at that time.

At present, the Wuxi government is "married" Suntech Wuxi is very urgent, but the city still hopes to retain the Suntech brand, and can let the city's photovoltaic industry planning continue to develop, the future in the city can form from the battery, components to the development of photovoltaic power station Industry chain.

An executive from a photovoltaic company in Jiangsu stated that before the public development letter in June 2013, the city’s leaders had privately approached some of the giants of the photovoltaic industry and expressed their hopes for an order. There were various promises, but they were always intentional. The relentless water flow is mainly due to the fact that the entire industry is at a low level. There are still great risks after the market is closed, and it may become a burden. In addition, there is still no clear solution to the 10 billion yuan in debt, which has led many companies to dare to take over.

Two paths currently exist for Wuxi Suntech. There are two ways to go. First, four companies have one company taking over and controlling, and the Wuxi League of Nations are in charge of the new company; the other is that the negotiation failed and the Wuxi National Union desperated. Only to take over all of their own.

However, whether the above four companies can eventually take over Wuxi Suntech is still less variable than the last minute.

“At present, for Suntech Wuxi, there are two ways to go. First, one of the above-mentioned four companies took over and took control. Together with the Wuxi National League, they took over the new company; the other was that the negotiation failed and the Wuxi National Union had no choice but to He took over all of them.” The above-mentioned insider of Suntech Wuxi stated.

According to the source, Wuxi Guolian has been unwilling to accept Suntech's orders since it has never been involved in the photovoltaic industry and its business is not known. It is difficult to change the loss situation, and the continued sluggishness of other industries is also It was overwhelming, but under the government's arrangement, it was unable to take over. Therefore, the Wuxi National League has always regarded it as a hot potato and wanted to send this mess as soon as possible.

However, for some acquirer capabilities, the industry has many questions. As one of the intruders, Trina Solar, with its recent business performance, could hardly bear the huge debt problem of Wuxi Suntech. The financial report shows that in 2012, Trina Solar’s ​​operating income was US$1.3 billion, a year-on-year decrease of 36.7%, and net profit was a huge loss of US$266 million, which was more than seven times the net loss of US$37.8 million in 2011, and achieved gross profit of 57.2 million. The U.S. dollar dropped 82.8% year-on-year.

Since 2013, Trina Solar has been even worse. Its first-quarter operating income was US$260.2 million, a year-on-year decrease of 25.6%, net profit loss was US$63.7 million, and its net profit loss for the same period of 2012 was US$29.8 million. The amount of losses has more than doubled.

“In this case, Trina Solar will take over the burden on the company, which will increase the burden on the company.” A photovoltaic company in Jiangsu said that in his view, at this time, the acquisition of Suntech seems to be the lowest price, but the problem The reason is that if it is difficult to achieve profitability, it will certainly further drag down the purchaser's business.

The above-mentioned sources believe that the precondition for Trina Solar to acquire Wuxi Suntech should be that the debt problem of 10 billion yuan must be resolved. In addition, the local government may give preferential policies and support for land, taxation, taxes, and other aspects. "On the premise that the above problems are solved, Trina Solar should also consider the issue of profitability after the acquisition."

Regarding the 100 billion yuan debt problem of Suntech, some people in the industry suggested that the debt-to-equity solution should be adopted. That is to say, the creditor’s rights in the hands of the creditors should be converted into corresponding Wuxi Suntech shares. This seems to be a better solution to the debt problem. One of the programs, however, must be to convince the creditor that the company can be reborn or it will be difficult to implement.

However, for the "debt-to-equity swap" approach, creditors' opinions are not unified at present. In addition to the recognized ones, there are also creditors who believe that if Wuxi Suntech cannot be reborn, these arrears will only be frustrated, and in view of the current sluggish industry conditions, the date of obtaining profits will be very long, it is better to The cash is more practical. "Even if you get 6-70% of the debt, it's very good. At least it can partially solve the problem of the tight capital chain of your own company. If debt-to-equity swaps are used, it will be far-off."

A supplier of the debtor and Wuxi Suntech stated that it now appears that a clear restructuring plan will be introduced before the end of the year. Due to the serious debt owed, the company’s operation during this period has been very difficult and difficult to sustain. “Since the May debtor’s meeting in May, the new creditor’s meeting has not been notified. It makes people uneasy. No matter who took over, it is not important to us. We only want to get the money.”

According to the reporter’s understanding, the above-mentioned four strategic investors have already paid a certain amount of deposit, and they are currently investigating Wuxi Suntech’s due diligence. After the end, they will negotiate with the bankruptcy and reorganization management team respectively, and their restructuring plan will also be subject to claims. ** Will vote to decide whether to pass or not.