LDK on support
Some of LDK's debt gets paid by the eastern Chinese city of Xinyu
LDK has been in the financial trouble for some time. In the apparent rescue attempt some of the debt owed to a third party investment trust Huarong Trust, has been covered by the hometown of Xinyu. For one, the amount seem like a drop in the sea of needs. $3.4B in debt will not be improved by mentioned $185M and additional issue of $80M in equity, seems a bit weak as an attempt to stop the bleeding.
Unfortunately second part is more serious. This feeble attempt re-loads the argument for the critics of Chinese companies with new ammunition. For them it is a perfect example of unorthodox subsidies, unfair practices and other noise, which media uses to disqualify superiority of the Chinese solar industry. LDK' s issue is not just large debt but lack of operational competitiveness, proven in in their quarterly results. Companies which cannot compete cannot create revenue stream and lose market. I cannot image that LDK can have a market even in Mainland, under those circumstances.
There is also another possibility. All those small injections of money, may lead to change of ownership, which in return, would softly distribute working parts and eliminate the dead parts of the business. Save jobs and avoid chaos in result.
While the future is not clear, one thing remains certain. In the current state LDK does not have an ability to sustain itself.
