Yingli Solar Energy has been decimated by its massive debt burden, where most of its earnings are going to service the interest on its debt. The company which is still amongst the ten largest solar panel manufacturers in the world has repeatedly cut down its shipment forecast for 2015, as it faced working capital issues. Even as the industry is seeing a huge increase demand leading to most Tier 1 players being fully booked out, Yingli has been grappling with its debt issues which are not going away. Its stock price has been battered, as investors grow concerned over its solvency issues. Despite all these problems, Yingli is going ahead with building a new 300 MW solar panel factory in association with a major Thailand industrial group. This plant will be used by Yingli to sell solar panels to Europe and USA, which have imposed anti-dumping duties on Chinese made solar panels and cells. Note most of the other major Chinese manufacturers such as Trina Solar, Jinko Solar and others have already set up large cell and panel plants in Thailand and Malaysia to circumvent these duties. This has put Yingli at a significant disadvantage over its main rivals, as USA is the 3rd largest solar market in the world and is continuing to grow at a solid pace. The recent extension of Investment Tax credit (ITC) will allow the country to add an incremental 50,000 MW of solar energy capacity by 2020. USA will soon overtake Japan as the second largest market and no large solar panel company can afford to ignore the USA market.
Yingli Green Energy is said to be investing 689 million baht (around $190 million) to build new greenfield venture, in which it will have a 40% stake. Note Yingli is in no position to spend $100 million, given that it is not being able to utilize its current factories due to a lack of money. It will primarily depend on new loans from Thai banks and its Thai partner to fund this venture. It remains to be seen whether Yingli can survive its downward debt death spiral. Note most of the other large Chinese manufacturers such as LDK and Suntech which went bankrupt, resurrected themselves under new owners who bought the distressed assets for a cheap price.
Google+The manufacturer formed a joint venture with a unit of Thailand’s Demeter Corp to construct the 300-megawatt solar panel plant in Rayong province, Yingli said Tuesday in a statement on its website. The joint venture will invest 689 million baht in the plant.
