LDK Solar seeks Cayman liquidators

Embattled Chinese PV giant LDK Solar said it has filed for the appointment of provisional liquidators in the Cayman Islands, days before the latest deadline expires for a much-postponed bond payment.

LDK said it has filed with the Grand Court of the Cayman Islands, where the company is incorporated, “in connection with its plans to resolve its offshore liquidity issues”.

A previous interest payout on the bond was due last August, and LDK has since negotiated a string of “forbearance” extensions with its creditors while it tries to restructure its loans. The latest deadline is on Friday (28 February).

Despite the court filing, the  PV manufacturer claimed it “has made considerable progress in its discussions with its key offshore creditors...LDK Solar  intends to continue such discussions over the next few days and anticipates a favourable conclusion to those discussions”.

Analysts said the situation has echoes of the path trodden by fellow Chinese PV struggler Suntech, which filed for provisional liquidation in the Caymans last November.

But LDK – which has a total debt mountain in the range of $2.5bn – insists the move does not mean its operating units in China are poised to follow suit.

Its statement said: “The filing and the proposed appointment do not affect any of the LDK Solar-affiliated entities operating in the People's Republic of China and LDK Solar has no intention of initiating any additional debt restructuring proceedings in that jurisdiction.

“LDK Solar's bank group for its mainland China operations has expressed unanimous support for LDK Solar's continued discussions with its offshore creditors with a view to resolving its offshore liquidity issues.”