The resignation of the president and CEO of a major Chinese manufacturer for personal reasons is always suspicious. Doubly so if that company has not filed quarterly results in some time, and reported US$2.3 billion more in liabilities than assets in its most recent annual report.
Within the solar industry, LDK has become a symbol of the unwillingness of the Chinese government to allow solar companies to fail outright. The company reported losses totalling $3.4 billion dollars in 2011, 2012 and 2013, making 2014 losses of only $267 million seem relatively minor.
LDK is officially registered in the Cayman Islands, and both the parent company and offshore subsidiaries filed for bankruptcy in 2014, while restructuring bond payments. In April 2014, the New York Stock Exchange de-listed LDK, and the company continued as a pink sheets stock.
However, in China LDK has continued to manufacture wafers and PV modules, while restructuring and receiving financing from state-owned Chinese banks. And while the company’s market share has fallen substantially in recent years, LDK still produced 1.68 GW of wafers in 2014 alone.
Outgoing President and CEO Xingxue Tong was appointed to these roles three years ago, to replace LDK Founder Xiaofeng Peng. His resignation is effective immediately, but he will remain with the company as a consultant to ensure a smooth transition.
LDK Chairman Zhibin Liu will assume the role of president and CEO. Bloomberg New Energy Finance Head of Solar Analysis Jenny Chase says that this move may be related to the local Chinese government taking greater control of the company.
It’s possible that this shows the Xinyu government taking more control of the ongoing restructuring of LDK, since the new CEO, Mr Zhibin Liu, is also on the board of Xinyu State-owned Asset Management, Chase told pv magazine. However, she also noted that this is pure speculation.