LDK Solar Co., the second-biggest maker of solar wafers, sold about 25.3 million shares to Heng Rui Xin Energy Co., partly owned by the local government, for 86 cents each.
The shares represent a 19.9 percent stake in LDK, the Xinyu, China-based solar company said today in a statement. The company’s American depositary receipts, each worth one share, fell 5.3 percent to 91 cents at the close in New York.
The company has lost money for the past five quarters. It’s receiving financial support from the local government by selling the stake to a company that’s partly owned by the Xinyu government, and city officials have also joined its board, according to a filing today with the U.S. Securities and Exchanges Commission.
Xinyu City State-owned Asset Management Co., a state-owned company, owns 40 percent of Heng Rui Xin.
LDK named to its board Liu Zhibin, who is also chairman of Heng Rui Xin and general manager of Xinyu City State-owned Asset Management. His appointment was announced Nov. 5 as part of a management shakeup that included a new chief executive officer, and his business relationships were detailed today.
Yao Hongjiang, also appointed to LDK’s board Nov. 5, is director and general manager of Heng Rui Xin and a director of Xinyu Iron & Steel Co.
Heng Rui Xin is headed by Zhang Zhengyu, who is president and chairman. He owns 61 percent and is president and chairman of Beijing Hi-tech Wealth Investment and Developing Co., which in turn owns 60 percent of Heng Rui Xin.