- Banking regulator coordinating support for panel maker
- Yingli had total debt of $1.9 billion at end of third quarter
The China Banking Regulatory Commission, the supervising agency for the country’s banking industry, has asked China Development Bank Corp. to ensure 7.5 billion yuan ($1.16 billion) in loans are provided to struggling solar-panel maker Yingli Green Energy Holding Co. as it looks to pay off old debts and restructure, said a person familiar with the matter.
The lending is part of a push by the regulator to rally support for Baoding-based Yingli and follows a meeting between Cao Yu, deputy chairman of the commission, and a group of banks to coordinate support for the unprofitable panel maker, according to the person, who asked not to be identified because the issue is private.
Cao has urged the CDB to ensure a previously promised loan of 2.5 billion yuan is given to Yingli as quickly as possible and that an additional loan of 5 billion yuan is provided., the person said. The regulator has also asked banks to work with U.S.-listed Yingli to ease the burden on the company from interest due on loans, the person said, adding that the local government where Yingli is based has already lent 800 million yuan to the solar maker.
The move underscores China’s efforts to prop up the companies most likely to survive a shakeout in the solar industry. With a globally recognized brand and a position as the biggest solar supplier until 2014, Yingli is in better shape for a rescue than competitors such as Suntech Power Holdings Co. and LDK Solar Co. that were allowed to go under, Meng Xiangan, vice chairman of the China Renewable Energy Society, said in February.
Yingli’s news department declined to comment, according to an official who asked not to be identified in line with company policy. No replies were received to a fax sent to the banking regulator and an e-mail sent to CDB seeking comment.
Yingli, once the world’s biggest solar manufacturer, had total debt of $1.9 billion at the end of the third quarter. The company, whose American Depository Receipts have fallen more than 77 percent in the past year, said on Wednesday that it will be “very difficult” for it to repay 1.4 billion yuan of notes due on May 12 and that it has yet to reach a deal with creditors to extend the debt.
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.
An oversupply of solar panels has seen prices tumble by almost 70 percent since 2010, taking its toll on the financially weakest producers. Yingli hasn’t reported a profit since the second quarter of 2011.
— With assistance by Keith Zhai, and Feifei Shen