LDK sells Piecemeal

The bankrupt Chinese solar giant is selling itself piecemeal to generate enough cash to sustain operations. The LDK Solar (LDK) stock has zero value though it still supports a market capitalization of more then $100 million in the US stock market. The company has zero chance of servicing its monstrous $3 billion in debt, given that it could not repay the holders of its $23 million convertible debt in April 2013. The company is losing money every quarter with most of its products non-viable. The company by the Chinese government went on a massive expansion during the last 3-4 years. Most of this capacity now lies idle as the company has almost no working capital.

Read on GWI why Chinese Local Governments buy failed Solar Companies.

The company has sold equity stakes for a pittance and a stake in its poly plant as well. Now the company has sold a brand new factory in Hefei for 10% of its original value. The company sold it to an investment company owned by the local government for just $20 million. The plant if fully built would have costed at least $250-300 million. We don’t know what the government will do with the solar cell factory, since it would have no expertise to run the facility.

LDK was trying to sell this factory to another company but failed to do so. LDK still has a massive amount of poly and wafer capacity which are running at very low to zero utilization. The situation remains murky on what will happen with LDK Solar.

Available on GWI Free Guide on Solar Energy in India.

PV – Tech

Having defaulted on a bond due to cash flow problems, struggling PV manufacturer, LDK Solar has sold its major crystalline solar cell production plant to an affiliate of the Hefei City government for a nominal US$19.4 million. LDK Solar High-Tech (Hefei) Co., Ltd., located in Hefei City of Anhui Province in China had a solar cell manufacturing capacity of at least 2.2GW, which started production in early 2011 as part of LDK Solar’s strategy to become a fully-integrated module manufacturer rather than a wafer specialist.

LDK Solar has another smaller cell manufacturing facility Xinyu with a capacity of around 300MW per annum, according to previous company documentation. LDK Solar had previously struck a deal with Shanghai Qianjiang Group to purchase the Hefei solar cell facility. However, the company said that the buyer failed to secure government approvals by a March 30 deadline.