LDK Sells Solar Plants to Henan Xindaxin for $22 Million

Oct. 25 (Bloomberg) -- LDK Solar Co., the second-largest maker of wafers for photovoltaic cells, agreed to sell three solar plants at its manufacturing sites to Henan Xindaxin Materials Co. for 140 million yuan ($22.4 million) as part of an effort to improve its balance sheet.

LDK will lease the plants back from Xindaxin for 9.9 million yuan a year for six years, starting Nov. 1, and has the option to repurchase them, the Kaifeng, China-based chemicals company said in a statement on its website today.

The solar company had $3.6 billion in debt at the end of the second quarter, according to data compiled by Bloomberg, and analysts expect it to lose $440 million this year. The Xinyu, China-based company is seeking to improve its cash and liquidity position as the solar industry contends with falling panel prices, Chief Executive Officer Peng Xiaofeng said during a conference call Sept. 17.

LDK’s American depositary receipts, each worth one ordinary share, fell 3.6 percent to 86 cents at the close in New York. The ADRs have gained 21 percent since the company agreed Oct. 22 to issue new shares and sell a 19.9 percent stake to Heng Rui Xin Energy Co.

GCL-Poly Energy Holdings Ltd. was the largest wafer supplier by production capacity last year, according to data compiled by Bloomberg Industries.

To contact the reporter on this story: Ehren Goossens in New York at egoossens1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net