sirfisup

Suntech Power: Now a Takeover Target

The convertable notes are seen as a drag on the PPS however STP has stated that they are investigating all options as to how to deal with the convertable note issues. During their earnings CC STP said that they have very strong backing of Chinese banks and have sufficient lines of credit that they can draw from. I agree that the debt ratio is not favorable and that it will be a concern heading into 2009. The silver lining here is that STP recognizes that they need to come up with a solution as to how they will deal with the debt when its called in and have said that they are working on the solution to deal with this issue. It is of course Dr. Shi's best interest to calm the analysts views and provide a viable solution that will be met with positive sentiment from the investors and investment community. I suspect that STP will provide some answers as to how they will deal with this problem and it could be that they will either have a common stock offering that would IMHO not be in the best interest of the comapny as the markets are full of sellers and very few buyers however we could see some venture capital come to the aid of STP or we could see a loan from the Chinese govt of which could be derived from the $586 billion stimulus plan. The company has already stated that they are working on renegotiating their silicon contracts and plan to shelve expansion in 2009 which will save the company close to $100 million dollars. Hopefully within a few months STP will have an answer to to this concern and if the remedy is rec'd positively we could see some major upgrades and we could see a major uptrend as alternatives should see a resurgence to 2007 growth levels in 2010. The trick of course is to see how STP weathers the storm in 2008.