Is Beijing getting cold feet when it comes to bailing out its heavily-indebted solar companies?
State-owned China Huaneng Group Hong Kong Ltd walked away from its proposed acquisition of a 51% stake in indebted solar project developer GCL New Energy Holdings in November and now peer Panda Green could be about to suffer the same fate.
Shareholders in the debt-saddled project developer voted through a proposed HK$1.79 billion (US$230 million) bail-out by state-owned Beijing Energy Holdings Co Ltd at the end of last year as Panda Green scrambled to raise the cash to settle US$350 million of 8.25% senior notes due to mature on January 25.
Already largely owned by Chinese public entities, the anticipated windfall would have gone a big way towards raising the money required, in return for a 32% stake in the enlarged company.
The result of the shareholder vote indicated the bail-out would be completed on or before January 6. However, Hong Kong-listed Panda Green was forced to acknowledge yesterday the holders of only US$108 million of those notes had taken up its offer to postpone settlement for two years in return for new 8% notes during the interim.
With that response leaving the developer needing to raise US$242 million in ten days – now nine – from third-party “loans and/or bonds”, Panda Green today revealed the completion date had at some point been extended until yesterday – the date chalked in for the results of the debt restructuring proposal.
Even more ominously, that crucial bail-out date has now been pushed back again, to February 18, with the stock market update indicating both delays had become necessary to obtain the “government approvals” necessary.