LDK Solar Co., Ltd. announced the sale of $15.4 million worth of its newly issued shares to Fulai Investments Limited. The company will sell 12.0 million shares priced at $1.28 per share each. The gains from this sale of shares will be utilized for general corporate purposes in LDK Solar's operations.
The company in late Feb 2013 declared the sale of $5.0 million shares to Fulai Investments at a purchase price of $1.83 per share, which came to an aggregate amount of $9.2 million.
Earlier, in Jan 2013, the company entered into an agreement to sell $31.1 million worth of its outstanding shares to Fulai Investments Limited. LDK Solar is trying to reduce its massive debt burden of $3.1 billion through restructuring and the sale of shares.
LDK Solar sought a RMB 440 million ($69.8 million) loan from the China Development Bank Corporation for the purpose of financing technological modernization works at the Mahong Polysilicon Plant. The company also had to shed its loss making LDK Anhui asset for RMB 25 million (approximately $4.02 million) to Shanghai Qianjiang Group.
The stifling trade barriers adopted by the U.S. which includes countervailing duties ("CVD") of 15.24% and anti-dumping duties ("AD") of effectively 25.96% have taken a toll on the company’s businesses in North America. Moreover, the rumor of a possibility of Europe levying tariff duties on solar panels could further hurt the company’s operations.
However, LDK Solar is anticipated to offset these headwinds by relying on the Chinese domestic market which has bounced back after an economic slowdown. Additionally, the Chinese government’s proposed offering of subsidies to solar projects and free grid connection to PV distribution programs are factors that will work in favor of LDK Solar.
The company presently retains a Zacks Rank #3 (Hold). Other solar players currently performing well are Zacks Ranked #2 (Buy) Canadian Solar Inc. (CSIQ - Analyst Report) , ReneSola Ltd. (SOL - Analyst Report) and STR Holdings, Inc. .
Based in Xinyu City China, LDK Solar and its subsidiaries are engaged in the design, development, manufacture, and marketing of photovoltaic ("PV") products; and development of power plant projects.