LDK Solar Co. Ltd.
), amidst its restructuring mode, clinched a large-scale contract
for the delivery of solar modules to Thailand's premier developer
of photovoltaic ("PV') projects, EA Solar Nakornsawan Co.,
Per the agreement, LDK Solar will supply a total of 63
megawatts ("MW') of PV modules to EA Solar and a weekly transport
of 6.3 MW starting Aug, 2013.
Of late, the China based PV manufacturer has been struggling
to manage its substantial debt burden and has defaulted in
repaying to the holders of 4.75%, $23.7 million convertible
senior notes due on Apr 15, 2013. The company partially
compensated the loan.
Meanwhile, the company has been taking strategic steps to
counter financial problems. At the start of first-quarter 2013,
it signed an agreement to sell off its non-core Anhui assets for
RMB 25 million (approximately $4.01 million). Next, it received a
loan approval of RMB $440 million (around $69.8 million) from the
China Development Bank and sold 17.0 million shares to Fulai
Just recently, LDK Solar announced the sale of its entire
equity interest in the 2.2 Gigawatt (GW) solar cell manufacturing
ancillary, LDK Solar High-Tech Co., Ltd. to an associate of Hefei
City government, Hefei High Tech Industrial Development Social
Service Corporation. The transaction was priced at RMB 120
million (roughly $19.4 million).
The U.S.'s imposition of countervailing duties ("CVD") of
15.24% and anti-dumping duties ("AD") of effectively 25.96%, has
severely hit Chinese solar PV manufacturers, like LDK Solar,
among others. Europe is also contemplating to operate the tariff
policy, which if realized would prove harmful for the Chinese
However, we believe the Thailand contract to be a major gain
for the company in these hard times and will fetch sizeable
returns. The Chinese government's efforts to domestically promote
its renewables would also offer encouraging prospects to LDK
Subsequent to the Fukushima plant disaster, China has shifted
its focus on expanding its solar potential and plans to attain a
target capacity of 21 GW and 50 GW by 2015 and 2020,
respectively, which will create a huge domestic demand for the
Chinese solar module manufacturers.
LDK Solar at present carries a Zacks Rank #3 (Hold). Other
solar stocks performing well are
STR Holdings, Inc
Canadian Solar Inc.
), each with a Zacks Rank #2 (Buy).
Located in Xinyu City, LDK Solar and its subsidiaries are
engaged in the design, development, manufacture, and marketing of
photovoltaic products and development of power plant projects.
CANADIAN SOLAR (CSIQ): Free Stock Analysis
LDK SOLAR CO (LDK): Free Stock Analysis
RENESOLA LT-ADR (SOL): Free Stock Analysis
STR HOLDINGS (STRI): Free Stock Analysis
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