Chinese solar developers scramble to pay down debts

Chinese solar project developer Shunfeng International has announced a delay in the release of details of its proposed sell-off of its LED making business Lattice Power as it races to settle overdue debts of around US$381 million.

That development, on Friday, was followed a little later by the rival solar project business owned by GCL-Poly setting a February 10 date for a meeting to vote on a 430 MW project sell-off which could raise RMB2 billion (US$309 million) towards paying down more than RMB7 billion of debts due by June 30.

pv magazine reported in March that Shunfeng International had agreed to surrender its 59% stake in the LED business to satisfy creditor China Minsheng Banking Corp but that no longer appears to be the case.

Shunfeng announced the potential sale of its holding in the LED company on the last day of the year, with Nanchang Guanggu Group Ltd the buyer, at a price of RMB670 million. The rearrangement means Shunfeng will now have to settle the HK$150 million (US$19.4 million) it owes China Minsheng by June 30.

Overdue

That appears to be among the less urgent of the company's debt commitments with six payments already overdue to various other creditors.

Sino Alliance Capital Ltd has been owed HK$400 million (US$51.6 million) since the end of 2019 and a further HK$800 million since December 31. An unnamed bondholder has been owed HK$350 million since March 25 and two other debts fell due six days later, with Donghai Securities Co Ltd claiming RMB362 million (US$55.9 million) and True Bold Global Ltd HK$172 million. Chongqing International Trust has been owed RMB666 million since September 30.

The projected sale of Lattice Power is expected to generate RMB391 million for Shunfeng, with the company pledging to use RMB341 million of the proceeds to pay down debt and keep RMB50 million for, apparently much-needed working capital. Shunfeng stated, on December 31, it would continue seeking an extension to debt payments from creditors and would also sell off solar projects, having already disposed of a third of its portfolio – 540 MW – in March.

In addition to the overdue commitments, and the looming China Minsheng debt, Shunfeng will also have to find RMB255 million for Shanghai Chi Yi Investments Management Co Ltd by April 25.

The details of the vote required to approve the Lattice Power sale, originally promised by Friday, will now be published by February 19, Shunfeng told the Hong Kong stock market on Friday.

GCL-Poly

Meanwhile, GCL-Poly's independent shareholders can be expected to vote through a sale of 18 solar project companies to two funds controlled by state-owned China Huaneng Group at their February 10 gathering. GCL on Friday announced the projected sales would amount to a book loss of RMB183 million but would generate RMB2 billion from the purchase price and receivables and dividends owed by the project companies to the parent.

GCL's update to the Hong Kong exchange said the company had RMB7.16 billion of debts due by June 30 and it had RMB667 million in the bank at the same date last year.

Holders of US$500 million of three-year GCL senior notes due to mature on Saturday had until today to signal whether to agree to postpone settlement of the instruments for a further three years.