In a court filing on Tuesday, Chinese solar panel manufacturer Suntech Power Holdings Co. Ltd. said it would restructure itself as a distributor and servicer of solar panels, after US creditors tried forcing the firm into involuntary bankruptcy last month. Suntech, once the world’s leading supplier of solar panels, made the filing for provisional liquidation in the Cayman Islands in an attempt to block creditors from immediately seizing its US assets.

Suntech’s main unit is already facing bankruptcy proceedings in China, after it failed to make good on a $541 million bond payment in March 2013. Just last week, a former competitor—Shunfeng Photovoltaic International—paid $492 million for the unit, Wuxi Suntech, leaving the main company “a quasi-empty shell,” according to Raymond James analyst Ryan Berney in a Voice of America interview. Suntech owes its US creditors nearly $1.6 billion, slightly less than the $1.75 billion it owes to Chinese bondholders. It is unlikely that any of them will see that money, say analysts cited by Reuters.

A global oversupply of solar cells, increasing production costs, US tariffs, and questionable management practices all led to the rapid unraveling of what was once China’s largest producer of solar panels. At its height, the company had annual revenues of $3.1 billion and employed more than 20,000.

According to a company press release, Suntech will likely use its liquidation filing as a springboard to file for Chapter 15 bankruptcy in the United States. A Chapter 15 filing temporarily halts other US bankruptcy proceedings in favor of foreign ones. Such a delay would give Suntech additional time to conclude its restructuring plans.

Posted by Catherine Matacic