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COMPANYNEWS LDK continues to restructure 12


LDK SOLAR, a vertically integrated manufacturer of photovoltaic (PV) products and the world’s largest producer of multicrystalline solar wafers, has announced that LDK Solar and its wholly owned polysilicon manufacturing subsidiaries entered into a definitive agreement with China Development Bank Capital Corporation Ltd., a wholly owned subsidiary of China Development Bank Corporation, Excel Rise Holdings Limited and Prosper East Limited, investment funds affiliated with China Construction Bank Corporation, and an investment fund affiliated with another major Chinese bank (together, the “Investors”). Under terms of the agreement, the Investors agreed to subscribe to an aggregate amount of $240 million of series A redeemable convertible preferred shares of LDK Silicon & Chemical Technology Co., Ltd., a wholly owned subsidiary of LDK Solar incorporated in the Cayman Islands, which will, subject to the various PRC governmental approvals relating to foreign investments, hold and operate LDK Solar’s polysilicon business.


The preferred shares on an as-if- converted basis represent approximately 18.46% of the aggregate issued and outstanding share capital of the LDK Solar polysilicon subsidiary on a post-money basis. The preferred shares are convertible into the ordinary shares of the polysilicon subsidiary at the option of the holders at an initial conversion ratio of 1:1 basis, subject to customary anti-dilution provisions and to an investment internal rate of return of 23% for the fiscal year 2010 and 2011 as calculated by targeted net profit during such fiscal years. LDK Solar will be required to compensate the Investors with cash if it fails to achieve such net income targets; and the Investors will waive such compensation if the polysilicon subsidiary achieves a qualified IPO during 2011.


The Investors have a redemption right against LDK Solar and its polysilicon subsidiary within a two-year period of the consummation of the investment at a redemption price equal to 100% of the subscription price plus a 23% annual internal rate of return, if there occurs certain material events of breaches prior to its qualified IPO or the polysilicon subsidiary fails to consummate a qualified


IPO within the two-year period. The definitive agreement also gave the Investors certain veto rights over specified matters, right to access to certain information relating to the polysilicon business, and certain registration rights.


The investment is subject to certain closing conditions, including


governmental and corporate approvals of each party. As a part of restructuring of the LDK Solar polysilicon business for the above-mentioned investment, LDK Solar has recently completed the repurchase of the 15% ownership stake in its 15,000- metric-ton polysilicon plant from Jiangxi International Trust and Investment.


“We are very pleased with the continued support of our business from strong and reputable financial institutions,” stated Xiaofeng Peng, Chairman and CEO of LDK Solar. “Attracting this premier group of investors speaks to our success in growing our polysilicon business as we vertically expand our manufacturing capabilities and ramp polysilicon


Solar park acquired


THE WATTNER GROUP of Cologne, Germany, which is specialized in energy investments, has procured one of the largest solar parks in Germany. The solar park in Sietzsch, with a total capacity of approximately 12 megawatts, is located just a few kilometers from Leipzig airport. Market leaders BP Solar and IBC Solar each supply half of the solar park’s crystalline solar modules. The solar power plant extends across 33 hectares of industrial zone, an area the size of more than 40 soccer fields. The solar park receives the high electricity remuneration rate from the first half of this year, as the zoning plan was drawn up at an early date.


The financing partner for the solar park in Sietzsch is Deutsche Kreditbank AG (DKB), one of the pre-eminent German banks for the financing of renewable energy projects. With the investment in the Sietzsch solar park, the investment volume of the closed-end short-term Wattner SunAsset 2 fund increases to nearly 80 million Euros, with a total of 11 solar power plants.


production. We remain optimistic about the growth in our polysilicon business.”


Mr. Zhang Xuguang, President of CDBC, said: “New energy revolution is a technology transformation marked by the wide applications of direct utilization of natural energy . A successful new energy company in the future must have the following characteristics: superiority in technology, economics of scale and the ability to lower costs. We believe LDK Solar is a company with such capabilities, and the $240 million investment in LDK Silicon led by CDBC will continue to strengthen LDK Solar’s leading position in the solar industry.”


Managing director Ulrich Uhlenhut estimates that over the next 12 months, Wattner will reach an investment volume worth approximately 250 million Euros. Already today, Wattner is one of the major German investors in the field of solar energy. With new solar funds, there are also plans for an increased financing of projects abroad: “We are considering politically stable EU countries, but we are also currently conducting very detailed assessments of Canada and England in terms of the profitability of installations. Negotiations with project partners are right on track,” says Ulrich Uhlenhut.


www.solar-pv-management.com Issue I 2011


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