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by Doug Young
Bottom line: Yingli is in increasing danger
of defaulting on its heavy debt load, which could result in a
rapid and disorderly bankruptcy if its hometown government fails
to provide support.
After sending out a steady series of distress signals over the last
few weeks, solar panel maker Yingli Green Energy
has sent out its strongest trouble sign yet as it struggles under a
huge debt load. The most recent signal comes in a new filing with
the US securities regulator, in which Yingli says its big debt could
threaten its ability to survive, potentially making it the latest
casualty in a clean-up of China’s bloated solar panel sector. Such
an outcome would see Yingli follow in the footsteps of former
high-flyers Suntech and LDK, and
would raise the question of whether others may soon follow down a
First Suntech and LDK, and now Yingli have all struggled to
service billions of dollars in bonds and bank loans they used to
build plants for solar panel manufacturing at the height of an
industry boom 7 years ago. Suntech’s inability to pay off a
maturing bond was the trigger that finally forced it into
bankruptcy 2 years ago, though it was already in deep financial
trouble by then. Now the same thing could soon happen to Yingli,
whose prospects are being clouded by recent weakness in the global
solar panel market.
In its new filing with the US securities regulator, Yingli says
it has nearly 15 billion yuan in debt ($2.4 billion), more than
two-thirds of which is short term borrowings. (company announcement; English article) It said it is having
difficulty servicing that debt, which could affect its
competitiveness, its ability to get new financing and ultimately
its ability to stay in business.
The announcement sparked a sell-off for Yingli shares, which
tumbled 12.3 percent to $1.49 in the latest regular trading
session in New York. The shares were down another 25 percent at
$1.11 in after-hours trade, putting them in position to reach an
all-time low if the declines hold in the next regular trading
session. Shares of many other solar panel makers also dropped by
smaller amounts, with Canadian Solar (Nasdaq: CSIQ)
and ReneSola (NYSE: SOL)
both down by more than 4 percent.
Yingli has yet to announce its first-quarter results, but
reported net losses of nearly $90 and $210 million for last year’s
fourth quarter and the full-year 2014, respectively. Its new
announcement was its loudest signal yet that it may be the next to
fail, following a recent string of similar signs.
YIngli was recently forced to sell some of its idle land in its
hometown of Baoding to meet a debt payment due earlier this month,
barely managing to avoid a default. (previous post) Another solar manufacturer
named Tianwei, which also happens to be based in
Yingli’s hometown of Baoding, last month made headlines when it
became the first company to default on a domestic Chinese bond. (previous post)
It’s unclear if these 2 companies are related beyond the fact
that both are based in the industrial northern city of Baoding.
But what does seem clear is that the city of Baoding isn’t in any
rush to bail out these local companies, which certainly isn’t a
good sign for either. In the earlier Suntech bankruptcy, the
company’s hometown of Wuxi was much more proactive in the
bankruptcy process, even though Suntech’s management team was
ultimately forced out.
In this latest case it’s probably still too early to say if
Yingli will ultimately be forced into a similar bankruptcy, though
the likelihood certainly looks high. The earlier bankruptcies 2
years ago were relatively orderly, thanks to strong support from
But now many of those governments are coming under economic
distress as they struggle with their own big debt amid a slowing
Chinese economy. Accordingly, first Tianwei and now Yingli
probably can’t expect too much assistance from the local Baoding
government, meaning a rapid fall and disorderly bankruptcy could
come if and when the company fails to service its next upcoming
Doug Young has lived and worked in China for 15 years, much of
that as a journalist for Reuters writing about Chinese companies.
He currently lives in Shanghai where he teaches financial
journalism at Fudan University. He writes daily on his blog, Young´s
China Business Blog, commenting on the latest
developments at Chinese companies listed in the US, China and Hong
Kong. He is also author of a new book about the media in China, The
Line: How The Media Dictates Public Opinion in Modern China.
Sen. Shelley Moore Capito, R-W.V., recently joined with other longtime climate deniers to introduce a bill that would derail the Environmental Protection Agency’s Clean Power Plan. The plan when finalized this summer would set the first-ever…
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By Jeff Siegel
all over the world, and without a doubt, there is no place more
beautiful than Hawaii, particularly the island of Kauai.
The weather, the ocean, the rain forests, the food – it just
doesn’t get any better.
Although if state lawmakers get their way, there could soon be a
cherry on top for renewable energy supporters.
As recently reported in Greentech Media …
Lawmakers in Hawaii passed legislation last week (in a 74-2
vote) requiring the state to generate 100 percent of its
electricity from renewable energy resources by 2045. If HB 623
is signed into law by Governor David Ige, Hawaii will become the
first U.S. state to attempt complete decarbonization of the
Today, Hawaii’s energy mix is more than 80 percent fossil fuel,
with oil providing the majority of electricity generation on the
Now I’ll be the first to admit, I find free market solutions
superior to mandates and legislation. In a real free market, the
government wouldn’t even be necessary in this situation. The
better mousetraps – in this case, solar, wind and energy
efficiency, would quickly replace the islands’ heavy dependence on
Of course, to assume there’s a free market in energy is not a
safe assumption to make.
I won’t get into all of that here, but if you’re a regular reader
of these pages, you know full well that the oil and gas industry
has long enjoyed extremely generous subsidies – both direct and
indirect. And it is for this reason that renewables in Hawaii have
faced such a long, uphill battle.
But with renewables enjoying a rapid decrease in production
costs, even the unleveled playing field that exists in the world
of energy won’t be enough to stop this clean energy juggernaut.
A Great Opportunity
The fact is, Hawaii has access to some of the greatest renewable
energy resources in the world – solar, wind, tidal, and
geothermal. The fact that 80 percent of the state’s energy mix is
more than 80 percent fossil fuel-based is despicable. It
highlights a long-standing exercise in complacency that has been
facilitated by lawmakers, corporate interests and the relationship
between the two.
In any event, if this bill becomes law, we will see a great
opportunity for a number of publicly-traded solar companies,
including, but not limited to …