Ominous signs for LDK Solar?23. November 2012 | Markets & Trends, Industry & Suppliers | By: Jonathan Gifford
For some time speculation has swirled around LDK Solar, about whether its huge debts will prove too great a challenge for the vertically integrated photovoltaic manufacturer. In a sign that issues may be coming to a head, media reports have been published indicating that the company is being sued by Shanghai Rural Commercial Bank.
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 Agency’s 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 that’s why we have the debt, because we’re 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.
Choose between a digital and print subscription from pv magazine publisher Solarpraxis AG’s online shop!
- 5297 views
- 5055 views
- 4341 views
- 3275 views
- 2599 views
Want to publish your press releases for free? Simply log in or register, enter the information you want to appear and we'll publish it for you!