In Suntech's China Home, High Hopes For A Bailout
The local government in Suntech Power Holdings Co Ltd's home town is seeking to bail out China's biggest solar panel maker to stave off its collapse, a person with knowledge of the matter told Reuters on Thursday. One proposal under consideration is allowing Wuxi Guolian, the local government's investment arm, to take over Suntech's Wuxi business through a restructuring, and test a bankruptcy law introduced in 2007. "Production has to continue," said the source in the city of Wuxi, where Suntech's headquarters are located. "The Wuxi government is still seeking to bail out Suntech in one form or another. It has no intention to let it collapse as, if that happens, it would damage its reputation." With an estimated 10,000 employees in Wuxi, the local government would be keen to keep the company afloat. Such a move would also test the notion - widespread in Chinese bond markets - that local governments will always bail out important companies without inflicting pain on domestic creditors. Read more.