Nov 02, 2012 05:43 PM

LDK Solar Sets up Venture with State Coal Producer

(Beijing) – Debt-ridden solar equipment maker Jiangxi LDK Solar Hi-Tech Co. has partnered with a subsidiary of state-owned coal producer China Pingmei Shenma Group to develop photovoltaic projects in Henan Province.

LDK and Pingdingshan Yicheng New Material Co. set up a joint venture to engage in photovoltaic development, a company statement published on November 1 said. The two companies did not disclose information about shareholding structure.

The new venture, Pindingshan Yicheng New Energy Co., was registered on August 15 with registered capital of 20 million yuan, according to the Industry and Commercial Administration Bureau of the central province of Henan. The company's legal representative is Du Shuifeng, vice general manager of Yicheng New Material.

Yicheng New Material was established in 1992. It is a wholly owned subsidiary of Pingmei Shenma Group with core business in silicon carbide powder.

LDK and other similar Chinese firms have encountered difficult times of late. In the past few years, these companies have built up large inventories even as demand has fallen off. LDK is seeking partnerships to achieve new business growth.

LDK's first quarter report says it had 29.3 billion yuan in gross liabilities. The company has borrowed between 14 billion and 15 billion yuan from domestic banks, a bank source said.

The government has stepped in to help the company with its debt burden. On October 15, LDK said it would repay a 400 million yuan bond due on October 21. The source said the money would mainly come from the local government.

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