Shares of the Chinese solar panel maker Suntech Power Holdings Co. Ltd. tumbled Wednesday on concerns it will run out of cash.
The company faces a debt payment of $541 million by the end of this week that investors don't believe the company will be able to pay. Efforts to restructure the debt appear to be failing. The New York Times reported Wednesday that Suntech, which is one of the world's biggest solar panel makers, is on the brink of being taken over by the government of Wuxi, China, where the company is based.
U.S.-traded shares of Suntech fell 16 percent to 91 cents in trading Wednesday afternoon. The stock is off nearly 70 percent in the past 12 months.
A sharp drop in solar panel prices over the last several years has erased the profits of solar panel makers around the world. The plunge in prices is a result of a glut of panels. That supply was fueled by easy debt issued to Chinese solar panel makers to build new factories.
Now the biggest Chinese solar panel maker is being undone by the possibility it can't repay some of those debts.
Suntech has also been hurt by a revelation from July that a business partner faked $680 million in collateral for a loan Suntech had guaranteed. In August the company replaced former CEO Dr. Zhengrong Shi, who had helped the company grow into a world leader. Last week Shi was removed as chairman, although he remained as a director on the board.
Tuesday the company announced it was closing its factory in Goodyear, Ariz., due to high production costs. The move affects 43 workers.