Reuters: Global Markets: Suntech CEO steps down, CFO to take top job

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Suntech CEO steps down, CFO to take top job Aug 15th 2012, 15:01 Wed Aug 15, 2012 11:01am EDT (Reuters) - China's Suntech Power Holdings Co Ltd (STP.N) replaced its chief executive officer on Wednesday as China's largest solar maker struggled to shore up its finances amid a growing cash shortfall. Suntech said its founder and CEO Zhengrong Shi had been replaced by David King, the company's chief financial officer. Shi will also step down as chairman to become the executive chairman as well as its chief strategy officer. Shi, who founded Suntech in 2001, has been the most prominent of China's solar entrepreneurs, building the company into the world's largest panel maker by manufacturing capacity. Its disclosure at the end of July that it had likely been defrauded by a partner raised new fears that it may struggle to cover a convertible bond due in early 2013. The company has said it was working with its existing lenders to secure new financing and considering a debt issuance in China. That cash crunch, as well as the increasingly tough market conditions for solar companies, pushed the company's shares to lifetime lows earlier this month. Avian Securities' analysts Mark Bachman said he expected the company would ultimately want to pull its U.S.-based shares, since investors in the United States have largely abandoned the company. "I just don't see how appointing the CFO to this (CEO) role brings any confidence" to the market, he said. Suntech's shares fell 3.7 percent to $1.02 in morning trading on the New York Stock Exchange, bringing their decline so far this year to more than 52 percent. SOLAR SLUMP Like others in the industry, Suntech has seen its profits disappear as the huge expansion in solar manufacturing far outpaced growth in solar demand, creating a glut of the panels that turn sunlight into electricity. New import duties in the United States on Chinese-made solar products and a trade complaint lodged in Europe have also hurt the prospects for China's solar companies, which produce about two-thirds of the world's supplies. The company also disclosed on July 30 that its partner in power plant developer Global Solar Fund (GSF) may have fraudulently claimed to have posted 560 million euros ($690 million) in German bonds that were needed as collateral for construction loans. That could leave Suntech liable for posting the collateral for those projects, and may prevent it from selling GSF as planned to raise money to cover the $541 million convertible bond that comes due early next year. GSF is 80 percent owned by Suntech, 10 percent owned by Shi, and 10 percent owned by the partner, GSF Capital. On Tuesday, Suntech said it had won a court order freezing the global assets of GSF Capital. ($1 = 0.8116 euros) (Reporting by Matt Daily in New York; Editing by Gerald E. McCormick and Maureen Bavdek) Link this Share this Digg this Email Reprints

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