Tianwei Yingli May Repay Yuan Notes After Oct. 13 Deadline

  • Land sale transaction won't be done in time for note repayment
  • Yingli says it's determined to repay notes at some point

Yingli Green Energy Holding Co., once the world’s biggest solar panel maker, said unit Baoding Tianwei Yingli New Energy Co. may repay 1 billion yuan ($157 million) of notes after an Oct. 13 deadline.

Tianwei Yingli plans to liquidate idle land needed to raise the funds for repayment, but won’t get that transaction done in time, Jean Tian, an investor relations official from Yingli Green Energy, said on Thursday.

The unit is determined to repay both the principal and interest, totaling 1.057 billion yuan, on the notes at some point, Tian said. On Sept. 30, Yingli said it expected to receive about $138 million from land liquidation and the demolition of facilities held by one of its wholly-owned subsidiaries. A substantial amount of those funds would be used to repay the notes by year’s end, with the remainder expected to be repaid within a year, Yingli said.

Tianwei Yingli could become the latest Chinese company to miss payment on local-currency notes after three defaults this year, including the first from a state-owned enterprise, Baoding Tianwei Group Co. The firm has an indirect stake in Baoding Tianwei Yingli, and both are located in the northern city of Baoding.

An oversupply of solar panels has driven prices down more than two-thirds since 2010, taking a toll on some of the financially weakest producers.

While competitors began returning to profit by late 2013, Yingli has been dragged down by its debts.

The notes in question, sold to investors at par in September 2010, are trading at 86.3 percent of par. They were at 98.9 percent of par at the start of the year.

Yingli posted second-quarter sales of $438 million -- missing the average estimate of $522 million among four analysts surveyed by Bloomberg -- and said that 2015 shipments will be more than 22 percent below its previous forecast. The company also said it will write down the value of its assets and record a “significant” charge in the third quarter.

— With assistance by Lianting Tu, and Feifei Shen

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