Indosolar seeks second round of debt restructuring

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The largest solar cell manufacturer by capacity in India, Indosolar, has asked lenders to restructure its debt for the second time, saying that the continued low selling price of solar cells is harming the company’s bottom line.

Unable to make a profit, Indosolar has idled one of its manufacturing plants in Greater Noida, Uttar Pradesh, as it seeks out ways to restructure its debt obligations.

"Due to continued liquidity issues, the company has approached bankers for a second corporate debt restructuring package," said the New Delhi-based company in a filing this week.

The idled plant in the north of India can produce 160 MW of PV cells every year when running at full utilization rates, but the high cost of production and low solar cell prices mean that the plant "did not yield margins," said a company statement.

In January 2012, Indosolar was granted approval from creditors to reorganize some 3.6 billion rupees ($59 million) debt. Today, the company’s short-term liabilities exceed its short-term assets by 1.9 billion rupees ($31 million).

The solar manufacturer has joined other Indian solar companies in calling on the Indian government to impose duties on imported solar equipment in the wake of alleged competition from Chinese, U.S. and other "dumped" products. A global oversupply of solar equipment has left many Indian companies struggling to make a profit, while both China and the U.S. have imposed regulatory measures designed to protect their domestic interests.

New capacity in pipeline

Despite Indosolar’s continuing troubles, Indian state-run power company Solar Energy Corp. of India (SECI) has revealed plans to construct a new solar manufacturing facility in the country’s Andhra Pradesh state.

According to SECI, rising demand generated by plants currently under construction can actually help India recover from its glut of panels. Having signed an agreement with Andhra Pradesh Industrial Infrastructure Corp., SECI will construct a 1 GW capacity production facility in the Mahboobnagar district.

Construction of the plant will benefit the local economy, says SECI, with hundreds of jobs created and an auction planned to award all of the 1 GW generation capacity to developers.