LDK Solar Co., the second-biggest maker of solar wafers, declined the most in more than three months after sales fell 51 percent and the company said it won’t make a bond payment due tomorrow.
LDK’s American depositary receipts slumped 11 percent to $1.54 at the close in New York, the most since May 22. The Xinyu, China-based company’s ADRs are each worth one ordinary share.
The company has $2.8 billion in debt and ended the second quarter with $85.1 million in cash, the least since 2009. That’s not enough to make tomorrow’s payment, according to Chief Financial Officer Jack Lai.
“We have not made the commitment to pay tomorrow,” Lai said today on a conference call with analysts. “Definitely there will be a delay in this payment.”
LDK has a 1.7 billion yuan ($277.7 million) bond that matures Feb. 28, 2014, and is scheduled to make semi-annual payments. The company didn’t immediately reply to phone calls seeking details on the debt.
“There’s just a ton of debt coming due,” said Angelo Zino, an analyst with S&P Capital IQ in New York. “When you have these short term obligations and interests rates are trending upward that doesn’t bode well for companies like this.”
The company is seeking to restructure its liabilities and raise capital, according to Chairman Peng Xiaofeng.
“We are working closely with our stakeholders and different government agencies to negotiate our solutions,” he said on the call.
LDK’s quarterly loss, the ninth in a row, narrowed to $165.3 million, or 97 cents an ADR, from $254.3 million, or $2, a year earlier, it said in a statement today. Sales slumped to $114.7 million from $$235.4 million.
Solar-component prices, which were dragged down by oversupply and weak demand, have begun to recover, with wafers gaining 7 percent this year and panels up 7.7 percent, according to data compiled by Bloomberg.
LDK, whose shares have risen 21 percent this year through yesterday, forecast revenue of as much as $180 million in the third quarter from $114.7 million in the three months ended June. The company also expects third-quarter shipments of 350 megawatts to 450 megawatts of wafers and as much as 80 megawatts of cells and modules.
GCL-Poly Energy Holdings Ltd. is the biggest solar-wafer maker by production capacity.