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solarcat

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Tuesday, April 16th 2013, 1:28pm

STP and LDK remind me of something Elaine said in a Seinfeld episode about this "chinese" patient movie... "No. I can't do this any more. I can't. It's too long. Quit telling your stupid story, about the stupid desert, and just die already! Die!!"

http://en.wikipedia.org/wiki/The_English_Patient_(Seinfeld)

:):):)

SunSavesUsAll

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Tuesday, April 16th 2013, 3:58pm

LDK issued 17M shares at $1.87 and another 12M at $1.28 not long ago. Are the buyers of those shares really so dumb not to do their own DD, or did they not see this coming? I find it hard to believe that'd be the case.

Whoever wanted to sell the stock already sold. Whoever didn't sell will not sell no matter what. Most of of the shorts already covered and moved on as the SI is now down to a measly 3M. I can't see this company is going away, at least not in the foreseeable future.

Pop2mollys

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Tuesday, April 16th 2013, 4:06pm

They are being reduced to nothing just a shell of it's former self.... Just like STP

http://www.businessweek.com/news/2013-04…hefei-unit-sale

SunSavesUsAll

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Tuesday, April 16th 2013, 4:28pm

That's only one of the many subsidiaries.

http://www.sec.gov/Archives/edgar/data/1…d294025dex8.htm

solarcat

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Tuesday, April 16th 2013, 4:52pm

LDK Solar Co. (LDK)’s Anhui LDK New Energy Co. agreed to sell its stake in LDK Solar High-Tech (Hefei) Co. to an affiliate of the municipal government of Hefei, in China’s Anhui province [for $19.4 million for a loss between $80-90 million]
..............
LDK said Jan. 2 that it had signed an agreement with Shanghai-based Shanghai Qianjiang Group to purchase all of LDK’s shares of LDK Anhui. Qianjiang failed to get government approval by the agreement’s expiration date of March 30, LDK said in today’s statement.


So let me get this straight... LDK had an agreement to sell the Anhui LDK New Energy Co. back in Jan to Qianjiang, but Qianjiang failed to get government approval, so the municipal government of Hefe ends up buying it for $19.4 million for it for a discount of $80-90 million? Do I have that right?

I wonder what the agreed on price was with Qianjiang... and why the hell is the municipal government is giving even a single dollar to LDK to buy their junk?

BTW, the only place these government run companies will be able to sell to is China. Any western country would be completely insane to even buy a single watt from LDK or STP or their shell companies.

odyd12

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Tuesday, April 16th 2013, 4:59pm

$80 to 90M is the amount of residual value which is lost due to sale for $20M. That asset was $110M on balance sheet.

odyd12

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Tuesday, April 16th 2013, 5:12pm

Question Solarcat: Were you living in a western country during the recent housing crisis, banking system and insurance collapse, plus the the securitized mortgage no collateral fiasco? If you were and you were invested I am sure you know of the US government created a company which was buying all the real-estate debt from banks. They have closed 100s of banks, and sold assets on auction, customers’ accounts for pennies on a dollar to other banks, by sending agents and locking out banks on afternoon, and opening next day with another name. Here you have structure which municipality can turn into a usable space. Securities in the American economy had no collateral, it was empty shell, and yet government poured billions to buy them and dismantle them through write off, stock consolidations and government buying into securities of companies, just to stop bankruptcies by cash injections issuing entire share floats or even doubling like Citi.

France, Ireland, UK, Italy, Greece, shall I continue what those countries did and what role Germany played in saving each of them, during that period?

China’s solar industry is at the same level of concern to China as US banking system was to the US 5 years ago. Their actions are not only natural, but obvious and will continue.

This is using the same level of outcome, banks which were strong and profit immensely from the situation, solar companies which are strong will do the same. There is nothing “Chinese” about those actions.

odyd12

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Tuesday, April 16th 2013, 5:36pm

Does anyone know what capacity for LDK Solar Hi-Tech (Hefei) Co., Ltd,?
Is it in fact 1GW of cells and 500MW of modules?
There was a process of construction involving a loan below, is this it?

"XINYU CITY, China and SUNNYVALE, Calif., Aug. 16 /PRNewswire-FirstCall/ -- LDK Solar Co., Ltd. ("LDK Solar") (NYSE: LDK), a leading manufacturer of multicrystalline solar wafers, polysilicon and PV products, today announced that the Anhui Provincial Government has invited LDK Solar to invest in a world class solar cell and module facility in Hefei High-Tech Industrial Development Zone in order to establish a renewable energy manufacturing hub in the Province. The facility will include a total annualized capacity of 1.0 gigawatt of crystalline-based solar cells and 500 megawatts of solar modules, and production is expected to commence in the second quarter of 2011. Hefei High-Tech Construction and Investment Group will provide financing of RMB 2.5 billion to LDK Solar for up to three years to build this facility."

So most certainly there was a loan, which will come off the LDK books and their asset (and cash they sank into it in amount of $90M) is lost.

pg6solar

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Tuesday, April 16th 2013, 5:59pm

China’s solar industry is at the same level of concern to China as US banking system was to the US 5 years ago. Their actions are not only natural, but obvious and will continue.
Exactly, Odyd. I remember one very smart man was asked on a certain Yahoo board (when it was still civilized) a few years back, why of all solar companies (since solar sector was only a part of his portfolio) he was invested only in Chinese (and not the likes of FSLR or SPWR), his answer was simple: because they are Chinese.

solarcat

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Tuesday, April 16th 2013, 9:34pm

Odyd12, nobody will shed a tear if all the Chinese solars collapse and went bankrupt but China and a small number of investors who were dumb enough to invest in them (I'm talking about myself). Unlike the real estate bubble and banking crisis which had massive global reach and implications, the Chinese solar overcapacity and the collapse in prices that followed was of their own making. And IMO the longer it takes them to come to the realization that they F* UP when they kept throwing billions and billions to build that overcapacity that has been drowning their solar industry, including the good along the bad, and allow them to completely fail and take their garbage costly capacity with them, the better will be for them to try and salvage the few good ones. Even during the real estate bubble you had the largest bankruptcy in U.S. history. A nearly 160 year old institution was gone. But here the Chinese can't even let a freaking useless con mafia run neo-companies like STP and LDK fail, so that the rest of their solars may live. Instead the longer they prolong this solar zombie fiasco the worse it is for the rest of them. And not only that but they are losing credibility which may translate to even more tariffs. Sheesh...

odyd12

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Tuesday, April 16th 2013, 10:33pm

The real estate bubble was certainly the creation of the Wall Street and the greed and a bunch of innocent people lost, including not only houses but savings etc. It created a crisis which made 10% unemployment in the US. Solar industry in China has bombastically estimated around 40M employed and affected by the crisis in solar. Chinese built the supply for the demand. When the world awaken it decided to put a tariff on the product which was better, cheaper and mass produced, only when supply exceeded demand. Suntech has collapsed, and LDK is collapsing, but the conversation was why Chinese will not let them fail. I think for the same reason no country will allow any industry collapse, i.e. automakers in the US, since it has strategic importance to the country’s economy and it is hard to let things go. What happened in China was a matter of a demand and supply cycles. We all learn and then we forget. Any industry starting from shoe making to making warheads including this one will go through cycles. By-product of those cycles is death for useless and advancement of value for others. You and me, we have no understanding how this look in China, so we both think it is slow, inappropriate and harmful. The fact we do not know anything since out experience has no relation to Chinese company in liquidation in general, and China solar failure in detail. I disagree with strong words about the mafia and con. Again many words can be said about Enron and other examples in the US, but once more those are not exclusive Chinese company conditions so I would not to classify this here in this fashion. Lastly my point is that reorganization is already taking place and perhaps reorganization is as far as this goes, despite Wuxi Suntech being already bankrupt in the court of law. Suntech is now reduced to 600MW capacity, producing for the outstanding contracts. LDK for all I know lost 500MW of modules and 1GW of cells in return for $20M. You do purchase data; you know how many modules LDK sold, right? Things take time and things are happening. One more observation. Do not consider industry by stock market activity. For as long as I have bought solar stocks I always had the same complaint “Wall Street to have a lack of understanding and the use of a superficial judgment in attempts to explain it.” I created SPVI to offset views like that.

Pop2mollys

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Tuesday, April 16th 2013, 10:42pm

Export numbers were a great indicator past few months that LDK was having huge problems selling their brand...

This post has been edited 1 times, last edit by "Pop2mollys" (Apr 16th 2013, 10:56pm)


odyd12

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Tuesday, April 16th 2013, 10:53pm

I would appreciate if we did not disclose information which people pay for.

explo

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Wednesday, April 17th 2013, 1:21am

Odyd, LDK had 1.7 gw cell end of 2011 and planned to have 2.2 gw by end of 2012. Hefei is their main cell plant. Only capacity number per plant I've heard was 180 mw in Xinyu and then added 1gw with Hefei. I'm not sure where the new lines were added, but I think Hefei still dominates.

pg6solar

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Wednesday, April 17th 2013, 6:03am

Export numbers were a great indicator past few months that LDK was having huge problems selling their brand...
That problem actually started in the second quarter of 2011 (about this time two years ago). Remember they originally guided 2011 for close to $3Billion in revenues. Then when they were consistently missing (especially on module sales as per 11Q1 and especially delayed 11Q2 ERs) that year and significantly reduced guidance I finally completely got out of the position over summer of 2011. Yes, I could never imagine at the time them going (potentially) BK, but I knew that they could not compete on module sales. And with poly significant price drop in 2011 and their poly IPO a big IF, why even bother?

odyd12

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Wednesday, April 17th 2013, 7:17am

Odyd, LDK had 1.7 gw cell end of 2011 and planned to have 2.2 gw by end of 2012. Hefei is their main cell plant. Only capacity number per plant I've heard was 180 mw in Xinyu and then added 1gw with Hefei. I'm not sure where the new lines were added, but I think Hefei still dominates.
Isn't Hefei being sold? Hefei High-Tech Construction forked out $400M plus to finance the built and what it appears $110M was the LDK portion, while they carry debt of $400M (so the balance on books would be (400+110 or 550M). This is gets sold they lose book value of $90M but would also drop $400M from their debt their balance sheet?

solarcat

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Wednesday, April 17th 2013, 7:27am

With $3.13 billion in debt (per yahoo) and out of cash, does removing $400mil help any? I very much doubt it. Plus there is another bond coming due in June/July I think.

odyd12

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Wednesday, April 17th 2013, 7:36am

I am only describing balance sheet effects, in fact I am asking if everyone sees this the same. I got be honest I did not see in Q3 results anything current except $23M in convertible, but I saw a reference to $240M and June. This could be a short term loan, which needs to be rewritten, but I am open to suggestions.
This is the reorganization process reducing debt to operate company helps but to make it work again I doubt it.

odyd12

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Wednesday, April 17th 2013, 7:45am

RMB issued but settled in US$ senior note is due in 2014 and they show current value of $257M in non-current section of the liabilities. I think someone made reference to "payable" seeing maturity on a loan, which will be re-written as I mentioned before. I could be wrong.

explo

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Wednesday, April 17th 2013, 8:05am

Isn't Hefei being sold?

Yes, I though we were trying to establish how much capacity they have there. They've added a lot of cell capacity since they built it and since this was their main cell plant I think that's where they added the new lines.

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