Is Suntech Power Holdings Co., Ltd (NYSE:STP) Getting a Handout?
The Chinese solar power industry has been struggling for a long time now, primarily due to dismal demand and a huge overcapacity. On Sunday, the Ministry of Finance in China announced that solar power manufacturers will be offered tax breaks. This move comes at an opportune moment and will go a long way in providing the much-required support to the flailing industry.
The welcome refund
In a statement on its official website, the ministry said that the solar power product manufacturers will all receive 50% refunds of VAT’s with immediate effect. The NDRC had also provided some subsidies for solar-power stations in August-end. The entire industry is going through a turbulent phase and most of the companies like Suntech Power Holdings Co., Ltd (NYSE:STP) are buried deep in debt.
Fleeing the sinking ship
David Kind, Suntech Power Holdings Co., Ltd (NYSE:STP)’s Chief Executive Officer had exited from the company in mid-September. This was right on the heels of the exit of 3 other directors of the company that has been struggling with debt restructuring plans. The company’s Wuxi Suntech unit was dragged into insolvency proceedings by its Chinese lenders after the company defaulted on $541M in bonds. It has been faced with a huge buildup of inventory and its troubles seem like they are never going to end.
Suntech Power Holdings Co., Ltd (NYSE:STP) is a solar-energy company. In Monday’s trading session, Suntech Power Holdings Co., Ltd (NYSE:STP) rose by 25.93%. The company’s shares opened at a price of $1.33, climbed to an intraday high of $1.70 which was also the closing price for the day. Approximately 16.16 million shares were traded on Monday while an average volume of 2.87 million shares were traded over 30 days. The 52-week low of the shares is $0.30 while the 52-week high is $1.99. The company has a market capitalization of $307.43 Million.