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Chinese manufacturer LDK Solar has technically defaulted on repayment of a loan after making only partial payment on a $23.7 million bond due 15 April.
Citing "temporary cashflow problems", the company said in a statement that it had negotiated with two of several convertible note holders having a holding of US$16.55 million and agreed a settlement that included an undisclosed partial payment in cash before the due date.
However, LDK Solar noted that the undisclosed outstanding amount to the two bondholders had in effect been translated into a loan facility, though no further details were provided.
The Bank of New York Mellon, the trustee for the holders of the convertible notes, had been informed of LDK Solar’s default, while the struggling PV manufacturer said it would be prepared and willing to find a solution to the default with other bondholders.
LDK Solar has become the second only China-based company to default in the US bond market, the first being Suntech Power Holdings, another tier 1 PV manufacturer.
LDK Solar is preparing to release fourth quarter 2012 financial results on April 18.