While 100 million yuan (US$16 million) may seem a trifling matter for solar players the size of LDK Solar, Bloomberg has reported that a dispute over this sum is embroiling it. Reports are that the Shanghai Rural Commercial Bank has refused to allow LDK to extend the repayment tenure of the loans it has with the company. Bloomberg cites the official Xinhua News Agencys website, the Economic Information Daily report.
At the EU PVSEC, earlier this year, vice president global sales and marketing at LDK Solar Stuart Brannigan told pv magazine that the high debt levels that the company are carrying are due to the backend capacity the company has built up. "We have something like 5 GW of ingot, poly, wafer capacity. Our ability to expand quickly to meet aggressive levels of demand is relatively inexpensive and thats why we have the debt, because were already spent the money on capacity."
Brannigan continued that because of this, LDK Solar has been able to attract prospective investors and is in discussion with companies that may become strategic investors. "I think that for companies that might be looking for expansion in the future, I think LDK is quite a persuasive story," said Brannigan.
He concluded that despite the high debt levels, the company is running a lean operation with a small team outside of China and without some of the high costs of other Tier 1 players. "If you look at our peers, they have 3, 4 or 5 times as many people outside of China, with major sponsorship deals that they have to honor and all those other things going on. So the ability to run our organization, effectively, efficiently and get to the customers we need to is very cost competitive opportunity for people."
Earlier this month, LDK entered into a parntership with a Chinese state-owned coal producer.
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