[Guest Klothilde]

Well at least Solyndra went R.I.P. once they hit insolvency. LDK looks like the zombie version of Solyndra. You can drive 3 stakes into its heart and it will continue straying around.

[explo 629]

I'm not sure we know this. Have you checked their pulse lately? To me it seems like they are defaulting on their debts now. That's something considered not ok universally and will trigger things. To me there's a couple of things that CDB and other creditors need to figure out. Mahong poly plant has to live on (CDB are minority owners), since it is a world class poly plant close to completion after 6 years of construction. You cannot not move it, so it will stay in the outskirts of Xinyu and a potential buyer has to operate it there (good for Xinyu). "Xinyu wafer city" (LDK huge campus in Xinyu) is the question. This is just heavy machines in buildings, right, and a sh-tload of them. It's highend European and U.S. equipment that needs to consolidate to strong owners with effective manufacturing processes, but this prospective buyer might not want to have this operation in Xinyu or you might have to distribute it on multiple buyers, so Xinyu risk to lose a lot of workplaces here.

[Guest outsmart]

@explo I'm sure, there is a lot of talk behind closed doors, very interesting that until now, nobody wants to take over the ex-LDK Hefei operation. Now, it seems, the pv survivors are getting their revenge, they will take over parts of the operations, but at no cost and with a largly reduced debtload. I still see SOL to have 4GW capacity at the end of the year.

[explo 629]

Yes, as tariff situation clears SOL could clearly use more wafer capacity as they are selling 40% above current capacity, but as long as they can toll for free in China and industry is in tight capex mode they are not going to pay high prices for new capacity. I'm not sure how long Hefei will wait for good price on that 2 GW cell plant or how long LDK creditors or Xinyu (if they do like Hefei, doubt it since they are not as big creditors as Hefei were) will wait for good price on that 4.5 GW wafer capacity. Mahong poly plant is different. It has a significant national interest as the 5th best example in the world of something China highly desires.

[Guest Klothilde]

On the one hand they can ship their non-Chi production of almost Chi cost to Europe and sell for almost made-in-Europe price. On the other hand they are fuc*ed because of likely Chi retaliation tariffs on poly. So what do we make of REC? I'm to lazy to look up poly production numbers to see if all can be processed into modules, that's why I ask the experts here...

[explo 629]

They need to expand their module capacity to fully benefit, but should enjoy higher ASP in Europe to compensate for lower poly ASP.

[Guest eysteinh]

From an IR interview I did the day before the general assembly. They are currently using not all of own fbr. Optimal blend is around 50/50 % fbr and simens. Expansion in Singapore is not on the table currently. Chinese FBR plant is a possibility. Ok so that was from the IR interview. (that had many other details I asked together with other RECI members some 50 questions to the IR at REC) I would also note that the tariff will probably push prices higher so REC will perhaps be able to sell in china still. Given that it could get tough for revenue from fbr granulars. Luckily they have silane, floatzone and eg in other markets but yes tariffs will definitively hit revenue. Another note is 2$/kg drop in price is around 8,25 million $ lost (given 4125 MT solar grade) while a 0.047 $t increase (the increase now in last month and a half) is around 9,4 million $ if it translates into REC ASP. (given 200 MW sold) I would not call REC a winner or looser now. Too early to tell. Poly retaliation probably comming, but question is how this will affect poly prices in China. Also question how ASP and demand will react in Europe due to the tariffs. We will know more when the details of the preliminary tariffs hit in June 6th. Also keep in mind tariffs are not final until december 2013. Just preliminary now.

[explo 629]

Thanks for sharing. I'm surprised they are considering FBR China before expanding REC Solar. I would assume it takes so long to build a a new plant that the situation could have changed before it is completed.

[Guest eysteinh]

Well yes I was quite surprised myself, I belong to the camp of people wanting an expansion in Singapore as I believe it can be done much cheaper since Singapore is scaled with support units for twice the production level they currently have. If tariffs where set in stone in December then you would have a 5 year stable period of profits possibly. Sadly I only got around 4% support and the other 95% (1 % abstained) voted for the current board people (many have ties in refinancing of the selected board.) I got support from pretty much all the small stock owner of REC there was (20.8 million shares behind me out of the around 700 million shares represented at the voting, without any media helping me recruit support. We where together the 12th biggest shareholder of REC with those numbers) so if we had just recruited one of the major owners to our side the story would have been different. But it was realistically not going to happen, the most important was to show the major owners we where able to organize and if another refinancing would try to hurt the small time owners they would have problems getting the majority vote they needed. And we achieved that quite well.

[Guest eysteinh]

Please keep in mind I am no supporter of tariffs, I am just stating what I would see as a logical step to do if European tariffs did finalize in December. With one of the lowest cost of the non-Chinese producers and high quality reputation it would be natural to try to expand Singapore. It could also be done at around 20% less cappex than a 20000 MT new poly plant in China according to my estimates in talks with people who do projects like this. (assuming twice the production and expanding to 1.6 GW)

[Guest eysteinh]

With that said in FBR REC feels they have a technological leadership so they could want to expand now before another shortage of polysilicon in 2016-2017. It would also help a lot towards China if they expanded there I think.

[explo 629]

Fair points.

[explo 629]

http://investor.ldksolar.com/phoenix.zhtml?c=196973&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTg5MjAwNjEmRFNFUT0wJlNFUT0wJlNRREVTQz1TRUNUSU9OX0VOVElSRSZzdWJzaWQ9NTc%3d

[explo 629]

odyd, 40m positive operating cash flow. Nice? In my opinion profit tells a better story of past sins. I have to give them credit for producing a positive operating cash flow in a year with over 1 billion in net loss. They have been fighting for their lives squeezing out every last drop. But now there's nothing left to squeeze, instead they've been getting equity drips from Fulai Investment and others. Although highly dilutive to share holder, not making any difference to their financial condition. After losing 1.8b past two years they are left with have half a billion in negative equity and still have a quarter billion in PPE purchase commitments. Why don't they just give up and flee the country?

[explo 629]

Looks like the sold Hefei plant had 1.4 gw cell and 300 mw module capacity.

[Guest littleguyintucson]

"Due to the current and on-going deteriorating PV market conditions and overall global economic slowdown, we have suspended the implementation of our announced expansion plans for our polysilicon business during 2012, and have also suspended our polysilicon production since the third quarter of 2012" They are not even doing the Hydrochlorination that is the expansion they said they were doing.

[Guest littleguyintucson]

In early 2011, in order to make our polysilicon production more efficient and to lower our production cost, we began to implement debottlenecking improvements by installing hydrochlorination facilities at both our Xiacun Plant and Mahong Plant, which would streamline our productions and further increase our aggregate annualized installed production capacity at our polysilicon plants. As further described under “Item 4. Information on the Company — Our Products and Services — Polysilicon Production — Debottlenecking,” our debottlenecking initiatives aim to increase our silicon tetrachloride (SiCl4 ), or STC, to trichlorosilane (HSiCl3 ), or TCS, conversion by the improvement of the conversion capacity of our STC hot carbon rod reactors, or STC thermal converters. However, due to the current and on-going deteriorating PV market conditions and overall global economic slowdown, we have suspended the installation process since the first quarter of 2012

[Guest littleguyintucson]

"Mr. Peng, our founder and chairman, currently beneficially owns, through LDK New Energy Holding Limited, his wholly owned British Virgin Islands company, or LDK New Energy, 59,386,591 of our shares, " If I read this the CEO is down some 13 Million shares from his prior share counts but I have never seen a press release regarding the disposal. Was this a margin call they did not disclose?

[explo 629]

It seems like they'll get 400m from two local governments. I don't like this and think central government and big banks should force restructure. They'll just continue burn otherwise.

[odyd 1,304]

Ray's article on LDK, saga continues. https://solarpvinvestor.com/spvi-news/489-crippling-debts-deepen-ldk-crisis