JA Solar reassures bondholders ahead of deadline

JA Solar has begun shipping 2MW of modules to a project in Morocco, as the Chinese company reassures investors that, unlike rival Suntech, it will have no trouble repaying its convertible bonds coming due in May.

Last autumn loss-making JA bought back $89.2m worth of 4.5% senior convertible bonds coming due on 15 May, leaving with some $120m due.

The Shanghai-based company will be able to pay its bondholders on time, chief operating offier Xie Jian tells Bloomberg.

Suntech’s inability to meet its obligations to bondholders this month led to a group of powerful Chinese banks petitioning for its principal manufacturing subsidiary to be taken into insolvency proceedings.

JA’s Xie acknowledges that Suntech’s insolvency will make it more difficult and more expensive for other Chinese solar companies to obtain finance in future. JA reported a 572.1m yuan ($92m) operating loss last year, and its performance got worse in 2012 – culminating in a 631.3m yuan operating loss in the most recent quarter.

A bright spot for the company, however, has been the increasing success of its modules in an array of new markets. JA began as a PV cell specialist, but in 2009 took the decision to diversify into modules – the one part of its manufacturing operations that expanded in 2012.

Morocco represents the latest market entry for JA, where it is in the process of shipping more than 7,000 of its polycrystalline modules to local installer Jet Energy International.

The array using JA modules will be the largest in North Africa upon its completion this quarter, producing electricity at an estimated 0.8 dirhams ($0.90) per kWh – “similar” to traditional forms of energy in the region, claims Jet Energy chief executive Adil Rtibi.