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Suntech Gets Serious?

October 9, 2012

As solar sales slide, profits disappear, and with $541 million in convertible bonds coming due in 2013, Suntech (STP :NYSE) announced its strategy to retain its market leadership.

Of the five general points they released, four of them are probably a priority for all solar companies.

As with most of the solar industry, Suntech will be focusing on building customer relationships, downsizing its production, cutting production costs and streamlining its operation structure. Overall, none of this is good news for the downtrodden solar industry as Suntech is basically admitting they must get leaner and more strategic in the face of a softening market for solar panels.

Still, it’s uncertain where Suntech will be focusing its marketing efforts and how its reduced production capabilities will be aligned to the countries it will be focusing on.

But relief to Suntech’s beleaguered shareholders may come from the last point as the solar manufacturer states they have hired UBS Investment Bank to develop a strategy for the $541 million in convertible bonds due March 2013.

Considering Suntech’s net debt was $1.6 billion at the end of Q1 2012 and its short-term liabilities were $3.1 billion, UBS Investment Bank will definitely earn their money if they can rescue Suntech from this situation.

Shares of Suntech were up 1.74 percent in afternoon trading.

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