Yingli debt repayment extension proposal fails to reach agreement

Chinese Tier-1 solar company Yingli Green Energy Holding Co. has confirmed today in a statement that a request to extend a repayment deadline has been taken under consideration by China’s Bank of Communications Co., with no agreement formally reached.

The financially constrained solar panel producer revealed that it would have difficulty meeting the terms of the loan, which would require Yingli to repay 1.4 billion yuan ($220 million) on May 12.

While stressing that it will endeavour as much as possible to repay 1 billion yuan, the company called on the loan’s lead underwriter to agree to a "two to three year extension", while the Bank of Communications Co. requested that an additional Yingli unit – Yingli China – be included as an extra underwriter under the loan terms.

The statement said that no agreement was reached during the meeting, except that each of the parties involved have agreed to consider the other party’s proposal.

Yingli is no stranger to recent debt restructuring deals, having in September announced plans to restructure a payment on $157 million of medium term notes. Last May, Yingli warned its investors of impending financial difficulties ahead as a multitude of debt burdens continued to weigh heavily on its balance sheet.

Amid declining module shipments and revenues over the past few quarters, Yingli’s debt burden has crept up slowly, reaching $3.6 billion in liabilities in 2015, of which around half was short-term borrowings.

The reported receipt in February this year of a state-backed $300 million loan was intended to help smooth the firm’s restructuring process, which was confirmed in January after it had reported a net Q3 2015 net loss of CNY 4.2 billion.