May 26 (Bloomberg) -- LDK Solar Co., the Chinese solar manufacturer which defaulted on a bond that matured in February, said it received 2 billion yuan ($321 million) of loans from Chinese banks.
China Development Bank Corp., the nation’s biggest policy lender, is leading the funding from 11 financial institutions, LDK spokesman Peng Shaomin said in a phone interview today. LDK will spend more than 400 million yuan on a polysilicon project and use the remainder to boost its cash reserves, Peng said.
“The worst is over for China’s solar industry,” said Yang Kun, a bond analyst in Shanghai at Guotai Junan Securities Co., the nation’s third-biggest brokerage. “These loans show the government is supporting the company and the industry. It’s unlikely LDK will default on other borrowings in the future.”
Officials at China Development Bank didn’t immediately reply to faxed questions about the financing.
A majority of LDK bondholders in March agreed to a restructuring deal after the company, based in Xinyu city in China’s southern Jiangxi province, in August missed a semi-annual payment on its 1.7 billion yuan of notes that matured Feb. 28. Peng said the company doesn’t have any plans to borrow more money from banks in the short term.
LDK is seeking to avoid the fate of Suntech Power Holdings Co., a Chinese panel producer that defaulted on a $541 million bond in March 2013, leading to bankruptcy proceedings. Suntech filed for bankruptcy protection from U.S. creditors in the Cayman Islands on Feb. 21 and plans to sell its largest unit.
Another solar-panel maker, Shanghai Chaori Solar Energy Science & Technology Co. in March became the first company to default in China’s $4.2 trillion onshore bond market when it missed part of a coupon payment.
Syndicated lending in China has dropped 42 percent to $9.3 billion-equivalent so far this year, its lowest level since $9 billion the same period of 2010, according to data compiled by Bloomberg.
China Business News reported LDK’s latest financing earlier today, citing an unidentified company official.
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