China's LDK Solar Co., has announced today the appointment of two liquidators hired to begin winding-up procedures of the companys offshore business.
A court hearing has been set by the Cayman Islands court for April 2nd, where the two liquidators Tammy Fu and Eleanor Fisher of Zolfo Cooper (Cayman) Ltd will appear to hear creditors of LDK Company press their claim for outstanding monies.
LDK Solar first opened talks with holders of its 10% senior notes last month when it became apparent that the company would be unable meet the bond repayments. According to official reports, LDK Solar had $95.4 million in cash at the end of Q3 2013, and debts totaling $2.78 billion.
Having missed a semi-annual payment on the notes in August, the maturation of a $277 million bond in February left the company with no option but to begin insolvency proceedings. In December, the Chinese solar wafer maker had proposed to repay share holders at $0.20 cents on the dollar, or an exchange of notes for stock. That restructuring proposal was rejected, prompting last week's liquidation announcement and today's appointment of two joint provisional liquidators (JPLs).
The company did reiterate, however, that LDK Solar's mainland affiliates in China would not be affected, having received assurances from its bank group that financial backing would continue to be forthcoming. LDKs banking group in China expressed its "unanimous support" for the company's "continued discussions with its offshore creditors with a view to resolving its offshore liquidity assets," read the LDK statement.
In November last year, LDK solar posted a third-quarter loss of $127 million, despite securing an onshore credit facility of up to $256 million.
But last week the company was left with little option but to file for liquidation, stressing that it has no plans to apply for a similar process in China, and that the filing would not affect its manufacturing operations as the company strives to avoid stumbling into a similar fate that befell former rival, Suntech.
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