LDK Solar secures $19 million in funding, amends support agreements

By Caroline Salls

Pittsburgh, Aug. 1 – LDK Solar Co., Ltd. secured $19 million in funding commitments that enable its offshore restructuring to progress, according to a company news release.

Specifically, the company’s joint provisional liquidators received a binding commitment from Heng Rui Xin Energy (HK) Co., Ltd. for $10 million in cash and $14 million for working capital financing in connection with the offshore restructuring.

LDK and the liquidators said they have also identified a further $5 million of funding to be committed by company subsidiaries.

The joint provisional liquidators will ask the Grand Court of the Cayman Islands to sanction the terms of the funding commitments and amendments to previously approved restructuring support agreements.

Subject to court approval, the funding commitments will be sufficient to meet the exit financing requirements of the offshore restructuring, the release said.

The company said it has received an additional $3.2 million of interim financing since June 27 for its provisional liquidation in connection with the partial repayment of outstanding receivables.

As a result of the challenges in raising the exit financing and the resulting delay in the timetable for completing the restructuring, LDK Solar and the liquidators said they reached agreements with an informal committee for the company’s 10% senior notes due 2014, more than 79% of the holders of the convertible preferred shares of an affiliate of the company involving claims against LDK and a majority of shareholders for amendments to the senior notes and preferred obligations restructuring support agreements.

Under the amendments, the closing date for the offshore restructuring was extended to Sept. 30, subject to an automatic extension to Nov. 14 if the company files its scheme of arrangement with the Cayman court by Aug. 31.

The amendment also reduces a cash-out option for the holders of senior claims and preferred claims to $0.10 for each $1 of claim from $0.20.

In addition, the amendment allows the company to enter into a compromise with other offshore creditors with a combination of cash and/or equity and convertible securities.

According to the release, LDK Solar and the liquidators reached an agreement with auditor KPMG related to the completion of the audit of the company’s consolidated accounts for fiscal year 2013. LDK said it expects to file its annual report for the year ended Dec. 31, 2013 by Oct. 31.

LDK Solar is a manufacturer of photovoltaic products based in Xinyu City, China.

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