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LDK Gets $71 Million China Development Bank Loan for Upgrade

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Feb. 1 (Bloomberg) -- LDK Solar Co., the second-biggest maker of wafers used to make solar cells, received approval for a 440 million yuan ($71 million) loan from China Development Bank Corp. to upgrade its Mahong polysilicon facility.

LDK will use the loan to invest in hydrochlorination technology that will cut production costs, according to a statement on its website yesterday. The company said it has invested more than 12 billion yuan in the facility, swelling its debt burden.

Manufacturers of the raw material for solar panels have seen a 43 percent decline in the average spot price in the past year due to excess supply, according to data compiled by Bloomberg. The plunge has led some companies including Ningxia Sunshine Silicon Co. to file for bankruptcy.

China Development Bank in 2010 extended as much as 60 billion yuan to LDK in a five-year credit facility. The Mahong plant had a capacity to produce 15,800 metric tons of polysilicon annually, according to Bloomberg New Energy Finance.

LDK’s American depositary receipts, each worth one ordinary share, jumped 9.1 percent to $1.68 at the close in New York yesterday, the most since Jan. 4.

To contact the reporters on this story: Feifei Shen in Beijing at fshen11@bloomberg.net; Justin Doom in New York at jdoom1@bloomberg.net

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