Debt-saddled Panda Green and Singyes wait on Chinese state-backed bailouts

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In the briefest of stock market updates today, heavily-indebted solar project developer Panda Green hinted at possible salvation in the form of yet more Chinese public funds.

With shareholders having in March agreed to sign off almost a third of the company to Chinese state-backed entities – with the largest batch of shares issued capitalizing a debt of US$123 million – Panda Green today revealed coal miner and power company Beijing Energy Holdings Co Ltd has signed a non-binding agreement to subscribe to a further shares issue.

The scant update contained no details of what proportion of the solar developer would be obtained by the state-backed fossil fuel company and noted the shares issue would have to be approved by shareholders.

China takes control of solar businesses

With the Hong Kong listed company reporting a RMB20.8 billion (US$3 billion) debt pile last June, of which HK$1 billion (US$128 million) was reportedly due for repayment in May – as part of RMB5.5 billion due this year – shareholders in March agreed to capitalize a US$123 million loan from Chinese state-backed Qingdao Investment into a 19.96% slice of a business enlarged by the issue of new shares equivalent to 68% of the business.

The State Owned Enterprise Structural Adjustment China Merchants Buyout Fund committed to acquire up to 7.57% of the company and local authority-linked Shenzhen City Guoxie First Equity Investment Fund signed up for a 0.84% stake in a shares issue intended to raise HK$996 million.

It looks set to be an expensive period for Beijing, which is preparing to come to the rescue of another indebted PV developer – Singyes Solar – which today confirmed it will present its long-awaited financial results for last year at a meeting next Friday.

Singyes needs the support of 75% of the holders of US$430 million of defaulted credit notes and convertible bonds to push through a debt restructuring plan. That scheme in turn depends on Chinese state-backed body Water Development (HK) Holding Co Ltd completing a HK$1.55 billion shares purchase to take up a 66.92% stake in Singyes.

That state Singyes is in was reflected by the fact the company moments ago confirmed it will not settle the outstanding RMB96 million due to the overseas holders of convertible bonds on Thursday, and will instead strive to reach an agreement with the holders as part of its larger debt restructuring plans.

This article was amended on 02/08/19 at 1642 (CET) to add the update given in the final paragraph.