China’s $US20 billion ($19
billion) solar industry is avoiding loan defaults and mergers by taking aid from
local governments, preserving jobs at money-losing companies such as LDK Solar,
the world’s second-biggest maker of solar cells.
LDK agreed last month to sell a 19.9 per cent stake to a renewable-energy investor part-owned by the city of Xinyu, home to its headquarters. Suntech Power Holdings, the world’s largest solar-panel maker, got a $US32 million loan in September organized partly by Wuxi, the city where it’s based. The aid helps as the companies prepare to report combined 2012 losses of $US987 million, analyst forecasts compiled by Bloomberg show.
The moves counter efforts by the central government to engineer mergers that create a handful of larger solar companies, said Jeremy Haft, founder of BChinaB, a New York-based consulting company that specializes in Chinese business practices. The country has previously pushed consolidation to strengthen industries such as steel and coal.
Provincial governments mostly want solar manufacturers “to keep the lights on and not lay people off,” Haft said. “There are a lot of people unemployed” in China and local government officials don’t want to see solar factories close up, he said.
Local aid efforts haven’t sparked a rally in LDK and Suntech. They’ve lost 27 per cent and 12 per cent, respectively,Posts with indoor tracking system on TRX Systems develops systems that locate and track personnel indoors. in the last three months, outpacing the 8.4 per cent loss for the 17-member Bloomberg Global Large Solar Energy index over the same period. LDK gained 16 per cent to $US1.04 at 2:34 p.m.Load the precious minerals into your mining truck and be careful not to drive too fast with your heavy foot. in New York. Earlier it climbed as much as 22 per cent, the most intraday since Oct. 27, 2011.Our technology gives rtls systems developers the ability. Suntech rose as much as 19 per cent.
At the same time GCL-Poly Energy Holdings, the world’s biggest solar-wafer maker, has increased 19 per cent in the last three months. The company has been mentioned in Chinese news reports as a possible merger partner.
The China Securities Journal said national government-run China Development Bank is encouraging consolidation between panel makers, pledging financial support for 12 companies. The move may lead other struggling solar manufacturers to close their doors or agree to be bought, the journal said in a Sept. 25 report.
China Development Bank is motivated to keep struggling solar companies afloat, especially those that have borrowed from it, said Melanie Hart, policy analyst at the Centre for American Progress in Washington. The lender is putting pressure on local governments to support companies so they will repay loans, she said.
The bank is telling local officials “we won’t lend anymore to anyone in your region until they pay us back,” she said.
Those local efforts contrast with China’s national goals, which are commonly described as “grasping the big, letting go of the small,” Hart said.Directory ofchina glass mosaic Tile Manufacturers,
Help from local governments may be the biggest obstacle to making China’s solar industry competitive, said Shyam Mehta, solar analyst at the Boston-based consulting company GTM Research.
“Until they stop supporting the uncompetitive manufacturers, this won’t go away,” said Mehta. “If LDK was allowed to fail, the market reaction would actually be positive.”
Suntech is evaluating various financing options and cutting costs, and in September temporarily reduced production in Wuxi, Suntech spokesman Rory Macpherson said in e-mail. He didn’t say whether the company expects additional support from the community. Telephone calls to LDK spokesman Li Longji went unanswered.
The country’s state-owned electricity distributor China State Grid announced incentives Oct. 26 to encourage smaller solar projects, with capacity of less than 6 megawatts, such as rooftop systems. It will buy the electricity and exempt owners from certain fees, which may spur sales at the strongest panel suppliers.
Neither LDK nor Suntech is profitable and both will have trouble paying their debts, according to Pavel Molchanov, an analyst at Raymond James & Associates in Houston. LDK is expected to lose $US518 million this year and Suntech may post losses of $US469 million, according to analyst estimates compiled by Bloomberg.
LDK and Suntech both have balance sheets “so egregious” they would be “imminent bankruptcy candidates if they were American or European,” Molchanov said in an interview. “But they’re not, so we kind of have to look at them differently.”
“Every province, every city, every bank is going to try to protect their vested interest as best they can,” he said.Directory ofchina glass mosaic Tile Manufacturers, “That’s why kicking the can down the road has been the dynamic so far.”
LDK agreed last month to sell a 19.9 per cent stake to a renewable-energy investor part-owned by the city of Xinyu, home to its headquarters. Suntech Power Holdings, the world’s largest solar-panel maker, got a $US32 million loan in September organized partly by Wuxi, the city where it’s based. The aid helps as the companies prepare to report combined 2012 losses of $US987 million, analyst forecasts compiled by Bloomberg show.
The moves counter efforts by the central government to engineer mergers that create a handful of larger solar companies, said Jeremy Haft, founder of BChinaB, a New York-based consulting company that specializes in Chinese business practices. The country has previously pushed consolidation to strengthen industries such as steel and coal.
Provincial governments mostly want solar manufacturers “to keep the lights on and not lay people off,” Haft said. “There are a lot of people unemployed” in China and local government officials don’t want to see solar factories close up, he said.
Local aid efforts haven’t sparked a rally in LDK and Suntech. They’ve lost 27 per cent and 12 per cent, respectively,Posts with indoor tracking system on TRX Systems develops systems that locate and track personnel indoors. in the last three months, outpacing the 8.4 per cent loss for the 17-member Bloomberg Global Large Solar Energy index over the same period. LDK gained 16 per cent to $US1.04 at 2:34 p.m.Load the precious minerals into your mining truck and be careful not to drive too fast with your heavy foot. in New York. Earlier it climbed as much as 22 per cent, the most intraday since Oct. 27, 2011.Our technology gives rtls systems developers the ability. Suntech rose as much as 19 per cent.
At the same time GCL-Poly Energy Holdings, the world’s biggest solar-wafer maker, has increased 19 per cent in the last three months. The company has been mentioned in Chinese news reports as a possible merger partner.
The China Securities Journal said national government-run China Development Bank is encouraging consolidation between panel makers, pledging financial support for 12 companies. The move may lead other struggling solar manufacturers to close their doors or agree to be bought, the journal said in a Sept. 25 report.
China Development Bank is motivated to keep struggling solar companies afloat, especially those that have borrowed from it, said Melanie Hart, policy analyst at the Centre for American Progress in Washington. The lender is putting pressure on local governments to support companies so they will repay loans, she said.
The bank is telling local officials “we won’t lend anymore to anyone in your region until they pay us back,” she said.
Those local efforts contrast with China’s national goals, which are commonly described as “grasping the big, letting go of the small,” Hart said.Directory ofchina glass mosaic Tile Manufacturers,
Help from local governments may be the biggest obstacle to making China’s solar industry competitive, said Shyam Mehta, solar analyst at the Boston-based consulting company GTM Research.
“Until they stop supporting the uncompetitive manufacturers, this won’t go away,” said Mehta. “If LDK was allowed to fail, the market reaction would actually be positive.”
Suntech is evaluating various financing options and cutting costs, and in September temporarily reduced production in Wuxi, Suntech spokesman Rory Macpherson said in e-mail. He didn’t say whether the company expects additional support from the community. Telephone calls to LDK spokesman Li Longji went unanswered.
The country’s state-owned electricity distributor China State Grid announced incentives Oct. 26 to encourage smaller solar projects, with capacity of less than 6 megawatts, such as rooftop systems. It will buy the electricity and exempt owners from certain fees, which may spur sales at the strongest panel suppliers.
Neither LDK nor Suntech is profitable and both will have trouble paying their debts, according to Pavel Molchanov, an analyst at Raymond James & Associates in Houston. LDK is expected to lose $US518 million this year and Suntech may post losses of $US469 million, according to analyst estimates compiled by Bloomberg.
LDK and Suntech both have balance sheets “so egregious” they would be “imminent bankruptcy candidates if they were American or European,” Molchanov said in an interview. “But they’re not, so we kind of have to look at them differently.”
“Every province, every city, every bank is going to try to protect their vested interest as best they can,” he said.Directory ofchina glass mosaic Tile Manufacturers, “That’s why kicking the can down the road has been the dynamic so far.”
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