Court forces 4 LDK Solar units in China into bankruptcy restructuring
Solar modules. Author: Marco Bellucci. License: Creative Commons, Attribution 2.0 Generic
Just days after the resignation of its president and CEO, Chinese photovoltaics (PV) maker LDK Solar Co Ltd (OTCMKTS:LDKYQ) announced that four onshore subsidiaries have entered bankruptcy restructuring due to financial troubles.
A bankruptcy application, filed with the Intermediate People's Court in Xinyu City of Jiangxi Province by Xinyu City Chengdong Construction and Investment Corp and China National Grid (Jiangxi Province) Corp Ganxi Power Branch, has been accepted on November 17.
In a press release on Thursday, LDK Solar said that the proceedings concern Jiangxi LDK Solar Hi-Tech Co Ltd, LDK Solar Hi-Tech (Xinyu) Co Ltd, Jiangxi LDK PV Silicon Technology Co Ltd and Jiangxi LDK Solar Polysilicon Co Ltd, which have been unable to repay outstanding debts. The restructuring will enforce the subsidiaries to pay back CNY 281.6 million (USD 44.2m/EUR 41.3m) in borrowings and project fees they owe to Xinyu Chengdong and CNY 53.5 million of unsettled electricity charges to Ganxi Power.
The court has already established a restructuring group, which will be in charge of the process. The first creditors' meetings will be held on March 1, 2016.
In February 2015, LDK Solar exited bankruptcy proceedings in the US for the company and three local units, after which it came out of provisional liquidation on April 21. “It is regrettable that we have come to this inevitable juncture on our onshore financial crossroads, despite the tremendous efforts we have made in order to make progress in our onshore financial restructuring subsequent to our successful offshore financial restructuring,” chairman, president and CEO, Zhibin Liu, noted.