Yingli finally opens up on debt restructuring

Chinese PV manufacturer Yingli Solar has broken cover after five months of silence to admit it is undergoing a debt restructuring proposal.

The Baoding-based company issued a statement yesterday on the English-language investors’ section of its website which said its debt restructuring plan had been approved by its creditors and interested “governments” and “the court”. The statement went on to add the business would “cooperate with the court and administrator in accordance with the law to ensure the normal operation of the company”.

The announcement had opened with news of 100 MW of panel orders in February and a state-sponsored contract for a further 260 MW.

Yingli Green Energy Holding Co Ltd in October admitted it was in talks with its lenders about a potential break-up which would see its creditors take over its chief Chinese operating units.

Radio silence

During the five months since, when nothing was added to its English investors’ news section and the company failed to respond to enquiries from pv magazine, “Yingli's debt restructuring has progressed remarkably”, according to yesterday’s statement.

The update was characteristically light on detail but stated the restructuring plan included creditors converting debt into controlling stakes in Yingli’s China subsidiaries, repayment of “parts of financial debts and other payables” and a cash injection from local authorities, apparently in exchange for certain land use rights held by the company. Yingli also said it was in talks with “several potential industry investors”.

The manufacturer revealed in the 2018 annual report it published in May that its Baoding Tianwei subsidiary had overdue medium-term notes worth RMB4.45 billion ($636 million) and that the parent company had a RMB11.9 billion capital deficit, RMB4.77 billion of overdue short-term borrowings, had been unable to roll over debts of RMB2.39 billion due in April and May and would have a further RMB8 billion due by May this year.

Debt mountain

The U.S. Securities and Exchange Commission filing revealed three creditors had successfully won claims worth RMB468 million against the company, a further RMB110 million were being contested in the courts and Yingli had just received a fresh RMB106 million claim. It is unclear whether the court mentioned in yesterday’s announcement refers to any or all of those legal cases.

Rumors circulated at the SNEC trade show in Shanghai a year ago that Yingli was set to be taken over by the state-owned China Development Bank but pv magazine has been unable to put meat on the bones regarding those whispers.

The company did announce that the 260 MW panel order it received “recently” for the Zhangbei Internet Plus Smart Energy Demonstration Project, in the National Renewable Energy Demonstration Zone in Zhangjiakou city, Hebei, had come from a “state-owned enterprise”.

The stated intent of the restructured company to maintain “a modest scale” and devote production to high-efficiency products would imply Yingli’s chief Chinese operations are indeed being prepped to be hived off to creditors.