Solar shakeout: Banks pull LDK subsidiary Sunways’ credit facilities

The future of LDK Solar subsidiary Sunways looks increasingly uncertain after its banks cancelled its €6.6 million line of credit.

The majority-owned subsidiary of struggling LDK Solar had already been issued with “going concern” warnings from its accountants when it reported third quarter 2012 financial results back in November 2012.

Now Sunways has revealed in a statement that the “current economic situation of the photovoltaics industry and of the company” has led to its banks terminating all credit facilities and exercising rights to unspecified collateral provided by the company that had initially secured the credit facilities.

The management board of Sunways said it was continuing to talk with its banks in regard to the repayment of the loan amounts drawn down at the time of the termination in an effort to enable the company to continue operating.

Sunways has postponed reporting full-year financial results. The company last reported third quarter 2012 revenue of €11.5 million, down more than a 50% against the same quarter of 2011. The company had reported an operating loss (EBIT) of €11.2 million. 

Operating losses (EBIT) for the first nine months of 2012 amounted to a negative €24.5 million.

LDK Solar had reshuffled the management board of Sunways to include mainly LDK Solar executives, yet did not discuss any aspects of Sunways' revenue, shipments and financial position in its recent fourth quarter financial conference call. No financial analysts on the call asked questions about Sunways.