Chinese Solar Panel Company Close To Bankruptcy
By Paul Homewood
My second item of renewable news comes from Bloomberg:
Yingli Green Energy Holding Co., once the world’s biggest solar manufacturer, plunged the most in more than seven months after signaling it may be teetering toward bankruptcy.
Yingli declined 21 percent to $3.60 at the close in New York, the most since Sept. 29. That followed an 8.1 percent drop Friday after the Chinese solar company acknowledged “substantial doubt as to its ability to continue as a going concern.”
Yingli said Friday that it’s still in talks with creditors about repaying loans due in two weeks, and its losses for 2015 probably would widen because of a series of write-offs, the sliding price of solar panels and declining shipments caused by a shortage of working capital.
“It looks like they are not getting bailed out and they will need to file for bankruptcy,” Gordon Johnson, an analyst at Axiom Capital Management, said in an e-mail Monday.
Yingli hasn’t reported a quarterly profit since 2011 and has been in breach of loan covenants for at least a year. It has been kept alive by state-backed lenders led by China Development Bank Corp. The company said in April it would be “very difficult” to repay 1.4 billion yuan ($216 million) of notes due May 12.
This news follows on from the financial problems of the likes of Abengoa. But, if anything, Yingli is even more significant.
We have heard a lot about how the reducing price of solar panels has made solar energy supposedly competitive. But, as I have pointed out, this, to a large extent, has been the result of dumping by Chinese manufacturers.
As with the dumping of steel below cost, this is impacting on the manufacturers themselves, even in China. It is astonishing that Yingli has not shown a quarterly profit since 2011.
It is obvious that current market prices for solar panels are financially unsustainable.