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Shares in tier-one module manufacturer Yingli fell 36% yesterday in the wake of a warning from the company that it was struggling to continue “as a going concern”.

Shares recovered some of the losses to close on Monday 12% lower.

High debt levels, increased competition and almost four years of losses are taking a toll on the company leading it to warn that it may have to liquidate its assets.

In a statement issued to Bloomberg on Tuesday, the firm’s CFO Wang Yiyu said it was seeking a strategic investor or partners for a private share issue adding that there was no need for an overreaction.

While there has been an expectation in the past that state-influenced banks would also give the company a stay of execution, that resolve has been challenged by Baoding Tianwei’s bond default in April, the first in China’s history. The state-owned company’s fate was seen as a benchmark for China’s willingness to let the market weed out failing companies.

Beijing has also expressed a preference for consolidation in industry however, local governments, keen to secure jobs, have frequently provided support.