Former chairman says company board has no refinancing plan

The fate of the world's leading maker of solar panels has become more in doubt, as its recently ousted chairman said the board has no plan for refinancing the $541 million in convertible bonds due on March 15.

Shi Zhengrong, founder and the former chairman and CEO of Wuxi-based Suntech Power Holdings Co Ltd, made a statement on Wednesday that also said the board had no right to remove him as chairman, and that he was "shocked" by the recent decision, which he called "misconceived and unlawful".

Shi lost his job as CEO in August and said he has been excluded from meetings for the past month.

He also claimed that the board does not have a solution for refinancing the convertible bonds, Bloomberg reported on Wednesday.

Cheng Peng, a partner with Adfaith Management Consulting, said of the statement: "Shi's latest move shows the internal conflict within Suntech is rather fierce."

He also said the Suntech board might operate better with Shi out as chairman, as the Wuxi government, investors and lenders are now more likely to reach unanimity on how to save the company.

"For the local government, Suntech is like a name card, and has been contributing a lot to employment and tax revenue. No doubt the Wuxi government will help it avoid bankruptcy, by introducing capital or subsidies," he added.

Earlier media reports said Shi, who owns a 30.2 percent stake in the company, and whose family trust holds another 29.4 percent, has refused to use his personal assets as collateral.

Nomura said in a note that it was maintaining 'reduce' rating on Suntech.

It said the company's cost structure remains 10 to 20 percent higher than its Tier 1 Chinese peers, resulting in weak profitability and market-share loss.

Other problems are the question of its ability to pay back the convertible notes and Suntech's delay in releasing its second- and third-quarter results from last year, Nomura's note said.

Shi said he will take all steps necessary to protect the company from being harmed by "unlawful actions".

Suntech said on Monday that it has named director Susan Wang as its chairwoman, replacing Shi, who will stay on as a board member.

In 2008, Forbes magazine named Shi the wealthiest man in China with a personal net worth of $2.9 billion.

But the company was hit hard by the shrinking demand for solar panels overseas, and turned to commercial banks for help to deal with its maturing debt.

Orders for Chinese PV equipment slumped 80 percent year-on-year in 2012, the China PV Industry Alliance said in a report recently. It said up to 90 percent of Chinese polysilicon makers halted production, and 80 percent of solar panel producers shut down or sharply reduced output.

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