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China Development Bank has led an 11-bank consortium offering a 2 billion yuan (HK$2.48 billion) loan to LDK Solar, said LDK spokesman Peng Shaomin.
The funding marks a turnaround for the company since its formal default earlier in the year, with a debt restructuring announced in March that saw investors accept equity in lieu of debt, or take 20 cents on the dollar for outstanding debt.
The restructuring was for a 1.63 billion yuan senior note and for other, unspecified offshore debts.
Patrick Dai, a solar sector analyst at Macquarie, said CDB targeted 12 firms within the mainland's struggling solar energy sector to support with loans. The recent transaction indicated that LDK was on that list, he said.
CDB is supporting firms that employ a lot of people, or which develop leading new energy technology. "LDK has spun off assets but the company needs start-up cash to reactivate its polysilicon business, pay back suppliers and settle accounts receivable," Dai said.
The company had a polysilicon plant in Xinyu, Jiangxi province, that employed about 5,000 to 6,000 people, Nomura analyst Nitin Kumar said.
LDK started production at this plant in 2011, or just as polysilicon prices collapsed, and has since cut production substantially.
Polysilicon is a key ingredient in the production of solar cells. Kumar said prices for the commodity were at about US$40 per kilogram in 2011, and fell to US$25 at the end of 2011. Polysilicon prices were about US$22 per kilogram now, he said.
Shunfeng Photovoltaic International, an investment firm run by Cheng Kin-ming, has also put money into LDK, buying 21.6 per cent of the firm last year. Cheng is a local investor of some renown who targets distressed or otherwise out-of-favour assets.
Shunfeng also put in 3 billion yuan into rival solar firm Wuxi Suntech in November last year.
The solar cell sector has been under pressure globally amid overcapacity and falling prices.
Suntech Power defaulted on a US$541 million bond in March last year, leading to bankruptcy proceedings.
Another solar-panel maker, Shanghai Chaori Solar Energy Science & Technology, in March became the first company to default in the mainland's US$4.2 trillion onshore bond market.


Banks offer LDK Solar 2 billion yuan loan

CDB is supporting firms that employ a lot of people, or which develop leading new energy technology. Photo: Reuters

Business

Commodities

Bank consortium offers loan to troubled solar panel maker after debt restructuring in March


China Development Bank has led an 11-bank consortium offering a 2 billion yuan (HK$2.48 billion) loan to LDK Solar, said LDK spokesman Peng Shaomin.


Banks offer LDK Solar 2 billion yuan loan

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Bank consortium offers loan to troubled solar panel maker after debt restructuring in March

Bank consortium offers loan to troubled solar panel maker after debt restructuring in March