23 January 2013 09:10 GMT
17 December 2012 08:42 GMT
03 December 2012 03:53 GMT
By Andrew Lee in London
Thursday, January 31 2013
The loan, which was trailed in the Chinese media earlier this week, will be used to finance a technology upgrade at LDK’s Mahong Polysilicon Plant.
A statement says: “The financing will primarily be used to invest in hydrochlorination technology, a critical technological improvement necessary to significantly reduce the manufacturing cost of silicon production at the plant.
“LDK Solar plans to drawdown the loan as market conditions improve and the necessary equipment is ready for its use.”
According to the company, the more than 12bn yuan it has invested in Mahong “has been the primary reason for LDK Solar's high debt ratio”.
LDK has $3.1bn in debt on its books. It has already defaulted on loans, according to reports, and is struggling to replenish cashflow because of weak demand for its products, aggravated by its precarious financial position, say analysts.
The company has previously received support from the Xinyu city government and has been selling stakes in itself over recent months, in moves thought to be aimed at appeasing its lenders.
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