Bankruptcy talk stalks Yingli as annual financial report delayed

The debt troubles of China’s Tier-1 PV producer Yingli Solar have haunted the company into 2016’s second quarter, with the firm revealing today that it had filed for a 15-day extension for the publication of its 2015 full year financials.

The delay has triggered concerns that the Chinese giant could be on the verge of bankruptcy, with the statement by Yingli reiterating its "substantial doubt as to its ability to continue as a going concern" – words first uttered in May last year when the company revealed a hefty debt burden of more than $1.6 billion.

In the 11 months since, the company has limped on, albeit carrying what look to be fatal injuries: Yingli relinquished its top spot for solar modules shipments globally – held in 2012 and 2013 – to Trina Solar in 2014, and has since slipped further down the rankings, placing 8th at the end of 2015.

This delayed Form 20-F filing, due on May 2, will further erode confidence in the company’s solvency. The statement issued today read: "The company estimates that its net loss in 2015 was in the range of RMB 5.8 billion ($890 million) to RMB 5.9 billion ($900 million), increased from a net loss of RMB 1.3 billion in 2014."

The causes of this dramatic loss in revenue are given as a decrease in net revenues (down from RMB 12.9 billion [$2 billion] in 2014 to around RMB 10 billion [$1.5 billion] last year), which served to decrease gross profit and impair long-lived assets due to “lower-than-expected utilization of certain production facilities”, followed by a series of write-offs and the ever declining cost of solar panels.

Debt weighs heavily

Outstanding debt owed by the company continues to mount, and its initial concern is $216 million worth of notes due May 12 that Yingli says will be "very difficult" for it to repay. It was rumored earlier this month that Yingli had secured a loan to help tide the company over the coming weeks, but nothing was officially confirmed by the company. Today’s filing would seem to suggest that no such loan has been forthcoming.

One of the firm’s subsidiaries, Tianwei Yingli, was only able to repay 70% of unsecured five-year medium-term notes of RMB 1 billion, and will find it "very difficult" to repay the RMB 1.4 billion due later this month.

The statement added that Yingli requires more time to prepare and review its financial statements in order to finalize the assessment of its internal controls, including those related to the debt restructuring process.