Private Equity in Indian Honeymoon gets over with Zombie Funds
January 6, 2012How to Play 25 GW Chinese Annual Wind Capacity Increase for 38 Years – Sinovel and Goldwind
January 6, 2012LDK Solar is one of the most insolvent companies in the world right now with billions of dollars in debt,a battered balance sheet,continuing losses and dodgy accounting.However LDK has acquired a German company Sunways and continues to build new solar power plants as the Chinese state owned banks continue to fund it with cheap money without any consideration about losing their investments.LDK has become the poster boy of the Solarworld complaint against Chinese solar panel producers as it continues to run and thrive despite being insolvent.The Chinese government is hurting itself and its other solar companies like Trina,Yingli which are more competitive by continuing to support and increase the global glut of cheap solar panels.These solar panels are being clearly sold at below cost as most of the companies would be bankrupt without these absurd loans which make no free market sense
Sunpower another of the biggest solar companies in the world too is surviving due to its big parent Total.Note the CEO of Total was candid enough to say that Sunpower would be facing Chapter 11 without its support.Total just increased stake in Sunpower as the company continues to make losses.Sunpower has a high cost structure which in these times means you are dead .Even the most cost efficient companies in the West like First Solar faces survival questions.Sunpower with its high cost and high efficiency solar panels would have been dead by now.Note Sunpower too has a bad balance sheet,contorted accounting (already faced a scandal).In fact there are similarities between Sunpower and LDK.
Read a review of Sunpower Solar Panels
Total buying of Sunpwer
Total the French Oil and Gas Giant has agreed to acquire 60% of the 2nd largest US Solar Energy Company Sunpower of $1.38 billion besides providing it another billion dollars in easy credit for its system business.Note M&A in the Solar Energy Industry has picked up with Korean Chaebol buying up Solarfun and recently Meyer Burger buying Roth & Rau to create the 2nd largest solar equipment producer in the world.Note competition in the solar energy industry has become fierce with the entry of a number of top MNC conglomerates besides a number of thin film startups.Coupled with the decline in European solar subsidies,the situation of high cost solar panel companies has become extremely difficult.Evergreen Solar a small US producer of solar panels using ribbon technology is facing a cash crunch as its sales have plummeted.Other US and European companies too face difficult times after a stellar 2010 saved many a solar company from bankruptcy.
Total CEO Says SunPower Would Be Bankrupt Without Backing
Total SA (FP) Chief Executive Officer Christophe de Margerie said SunPower Corp. would be bankrupt without the French oil company’s backing.Speaking at an investment conference in Paris, de Margerie said Total will “turn around” SunPower.