Will Warren Buffett buy China's bankrupt Suntech solar company?
After filing for bankruptcy and seeing its stock fall 40% when it default on $541 million in bonds, Chinese equity Suntech Power Holdings Co. (STP) has rallied on rumors that Warren Buffett may buy the company.
Suntech鈥檚 rally brought other languishing Chinese solar companies along with it at it rose 0.4% to 89.44 at the close of trading in New York on 8 April. According to听, after falling 40% following the default, Suntech rose as much as 28% after a Hong Kong news service said Buffett鈥檚 MidAmerican Energy Holdings Co. might buy the Chinese manufacturer.
No one鈥檚 quite sure why Buffett might want to buy Suntech, with all the debt he would inherit at a time when solar prices are low. There has been no confirmation from MidAmerican Holdings that any deal is in the works.听(Related article:听)
Chinese lenders signed a听听for Suntech over the company鈥檚 debt in excess of $2.2 billion. Suntech continues to produce solar panels, however, further compounding the oversupply problem and forcing more drops in prices.
Solar stocks are extremely听听right now and unable to deal with the combination of oversupply and declining demand at a time when government subsidies are being slashed.
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