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Suntech gets $50 million loan from IFC; COO resigns

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suntechBIPV5Recent news from the word’s largest photovoltaic module maker, Suntech Power Holdings, is somewhat mixed.

On the upside, Suntech will close soon on a $50 million loan from the World Bank Group’s International Finance Corporation.

Suntech says the convertible loan will boost its new Pluto technology for silicon solar cells, along with debt financing requirements. The seven-year loan has a fixed-rate coupon of 5 percent per year payable twice a year on June 15 and December 15. If it is converted to a variable-rate loan, the conversion price is $18.00 per American depositary share, which was set at a premium over the average trading price during a span of 20 trading days immediately prior to IFC’s notice that it had approved the loan.

Under the agreement the New York Stock Exchange-listed company (STP) can draw down the loan after meeting certain conditions that it says it will satisfy within 30 days. Suntech has regional headquarters in Wuxi, China, Switzerland and San Francisco.

On the downside, Suntech said Tuesday that Johnson Chiang suddenly resigned as the company’s Chief Operating Officer on July 3, citing the ever-mysterious “personal reasons” for his departure. There was no further explanation for the move.

“We appreciate Johnson’s significant contributions to Suntech over the past year and wish him all the best in the future,” said Zhengrong Shi, chairman and CEO, in a brief statement.

Suntech’s stock has plummeted by nearly 65 percent over the past 10 months and the company’s revenue fell by nearly 25 percent in the first quarter though it was able to scratch out what analysts called a “surprise profit” for the period.

In other management changes, Suntech said Guangchun Zhang, vice president of Manufacturing Technology and Quality, will take over management of all crystalline silicon PV manufacturing operations in China.

Shi will temporarily oversee management of the Shanghai thin film plant, KSL Kuttler and BIPV manufacturing operations at Suntech Japan “until a suitable replacement is found.”

Regarding the $50 million IFC loan, Shi said, “These additional funds will strengthen Suntech’s financial position and support our transition to the high efficiency Pluto technology as we progress towards our goal of providing grid parity solar solutions.”.

IFC’s new investments in 2008 totaled $16.2 billion, a 34 percent increase over the previous year.

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Written by William DiBenedetto

8 July, 2009 at 3:35 pm

Posted in investment, solar

Tagged with , ,

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