The world's largest solar panel maker by capacity Suntech Power Holdings Co said Monday it is confident of staying afloat following a warning by the New York Stock Exchange (NYSE) of a delisting in the event of continued poor performance in the stock market.
"We have confidence to avoid delisting and will find ways to pay off our debts by March next year," Suntech spokesman Zhang Jianmin told the Global Times Monday, without elaborating on how.
The Wuxi, Jiangsu Province-based firm announced Friday it has been notified by the NYSE that the company has failed to meet the price criteria for continued listing because, as of September 10, 2012, the average closing price of Suntech was less than $1 per American Depositary Shares (ADS) for 30 consecutive trading days.
Under the NYSE rules, Suntech has a six-month correction period to avoid delisting, if "its shares have a closing price of at least $1 per share on the last trading day of any calendar month during the period and also have an average closing share price of at least $1 over a 30 trading-day period," said the statement.
Suntech has been in a downward spiral recently. It was reportedly involved in a financial fraud case of 554.2 million euros ($680 million) in earlier months, and was forced to cut its solar cell output mainly at Wuxi plants by 25 percent last week to survive a slump in the market.
"So far the future for Suntech (to boost its share) looks dark," Han Xiaoping, chief information officer at Chinese energy portal china5e.com, told the Global Times.
Suntech has management problems including blind expansion in pursuit of bigger scale rather than efficiency, said Han. "However, the US crackdown on the Chinese solar sector is a more important factor weighing down investor's enthusiasm and pulling down its stocks."
The anti-dumping duties imposed by the US and possible EU duties add more pressure on the company.
With total assets of $4.38 billion, Suntech had a debt of $3.58 billion by the end of the first quarter of 2012, according to its financial report.
To meet its capital needs, Suntech has no other choice but to go bankrupt and restructure, predicted investment management firm Maxim Group, according to a report by Shanghai Securities News.
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