- Solar panel maker wants three more years to repay $220 million
- Yingli says it will be `very difficult' to pay on time
Chinese solar-panel maker Yingli Green Energy Holding Co. said it will be “very difficult” for it to repay 1.4 billion yuan ($220 million) of notes due on May 12 and that talks so far with its creditors failed to reach a deal to extend the debt.
The company also will make its “best efforts” to repay the remaining portion of 1 billion yuan of notes, whose final installment is due by the same date, Yingli said in a statement released on PR Newswire on Wednesday. Both debts in the form of medium-term notes were borrowed by Yingli’s unit Baoding Tianwei Yingli New Energy Co.
Yingli said its officials met with Bank of Communications Co., the lead underwriter on both securities, on March 28 to propose extending the 1.4 billion yuan notes for another two to three years. The bank asked for another Yingli unit, Yingli China, to be added as guarantor. No agreement was reached, and the companies said they’d consider each other’s proposals.
The announcement revives concerns about the solvency of what was once the world’s biggest maker of solar panels. In the last decade, Yingli prioritized growth over profitability, borrowing to expand its factories until a plunge in the cost of solar panels forced the entire industry into a round of layoffs and cost cutting. Trina Solar Ltd. has since surpassed Yingli as the industry’s leading manufacturer.
A glut of solar panels has seen prices tumble by almost 70 percent since 2010, taking its toll on the financially weakest producers, including Yingli, which hasn’t reported a profit since the second quarter of 2011.
In February, a person familiar with the matter said Yingli was poised to get about 3.3 billion yuan in loans from state banks to help refinance debt. That hasn’t been confirmed, and Yingli made no mention of that credit line in its statement on Wednesday.
Baoding Tianwei still owes about 350 million yuan on 1 billion yuan of notes that were due for repayment on Oct. 13, 2015. The company told bondholders at the March 28 meeting that it would “make best efforts” to repay the remaining debt. The noteholders demanded the final full repayment with interest by May 12.
The company wants time to secure funding for the 1.4 billion yuan in notes, which it said will come from “continuing operations and other financing options such as liquidation of certain land-use rights” as well as bringing in new investors, according to Yingli’s statement.