The China Development Bank Corporation (Beijing, China) has approved a USD 70.7 million loan to LDK Solar Company Ltd. (Xinyu, China) to finance a technology upgrade at the LDK's Mahong Polysilicon Plant in Xinyu.

LDK states that the financing will be used to invest in hydrochlorination technology, which it says will significantly reduce the cost of silicon production at the plant. The company will access the loan as market conditions improve and the necessary equipment is ready to use.

LDK blames investments in Mahong for high debt

LDK notes that it has invested over USD 1.9 billion in the Mahong plant to date, and states that this is the primary reason for the company's high debt ratio.

The company has debt roughly equal to total assets and equity, and has made a number of moves in the last three months to shore up its financial position, including selling subsidiaries.

Due to price collapses driven by oversupply, wafer manufacturers and polysilicon producers are currently selling product below the price of production. NPD Solarbuzz notes that global polysilicon capacity utilization rates fell to 70% in the last two quarters of 2012.

2013-02-04 | Courtesy: LDK Solar | solarserver.com © Heindl Server GmbH

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