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SFCE Media Scan for May 20, 2015
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Burned again
May 20, 2015 | The Economist
SUNTECH, a Chinese solar-energy pioneer, rose to become the biggest clean energy firm in the world. Its boss, Shi Zhengrong, became the richest man in China. Then, thanks to a global industry downturn and alleged financial improprieties, the firm went spectacularly bustin 2013. -
Yingli Green Seeks to Reassure Investors After Stock Plunge
May 20, 2015 | Bloomberg Business
By Louise Downing
Yingli Green Energy Holding Co., the solar panel maker that warned last week about its ability to remain solvent, sought to reassure investors it’s taking steps to cope with a $2 billion debt load. -
Yingli Moves to Calm Investors After Going-Concern Warning
May 20, 2015 | The Wall Street Journal
By Chelsey Dulaney
Yingli Green Energy Holding Co. Ltd. on Wednesday moved to calm investors, saying it will be able to repay its debt on time after issuing a going-concern warning in a regulatory filing last week. -
Yingli CFO: Downstream business and gradual debt reduction at heart of company’s future
May 20, 2015 | PV Tech
By John Parnell
The “gradual decrease” in debt and cash from its nascent downstream business will be at the heart of Yingli’s long-term future, the company’s CFO has told PV Tech.
Industry News
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May 20, 2015 | The Economist
SUNTECH, a Chinese solar-energy pioneer, rose to become the biggest clean energy firm in the world. Its boss, Shi Zhengrong, became the richest man in China. Then, thanks to a global industry downturn and alleged financial improprieties, the firm went spectacularly bustin 2013.
Could Hanergy be the next Chinese Icarus? Hanergy Thin Film Power Group, another Chinese solar firm, shot from obscurity to become the world’s biggest clean-energy firm. As of yesterday, its shares had risen five-fold since September. This briefly made Li Hejun, its founder and owner of nearly three-quarters of its shares, China’s richest man. But on May 20th, as the firm’s annual general meeting was being held in Hong Kong, the shares plunged 47% before regulators halted trading.
What happened? The picture is unclear. It is still hard to make money in the solar business, but a number of other questions have recently been raised about Hanergy. It has been reported that regulators in Hong Kong have been taking a look at the company.
The listed firm’s murky relationship with its unlisted parent group has long raised eyebrows. Also, the Financial Times has shown that much of the share price tumble was due to unusual activity during the final minutes of trading. Strangely, Mr Li was notably absent from his own annual meeting with shareholders, choosing instead to preside at an event in Beijing described by one insider as part of his firm’s “corporate social responsibility”. Investors will be surely wondering who then is looking after the management’s fiduciary responsibilities.
http://www.economist.com/news/china/21651740-after-share-price-crash-hanergy-looks-latest-chinese-solar-firm-burn-out-burned-again
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Yingli Green Seeks to Reassure Investors After Stock Plunge
May 20, 2015 | Bloomberg Business
By Louise Downing
Yingli Green Energy Holding Co., the solar panel maker that warned last week about its ability to remain solvent, sought to reassure investors it’s taking steps to cope with a $2 billion debt load.
The second-largest panel maker said it’s confident it can keep making repayments on its debt and that it is taking steps to mitigate risks to its business. It blamed media reports for taking “out of context” remarks about its financial health from a statement it published on Friday.
The comments from Yingli help draw a distinction between it and Hanergy Thin Film Power Group Ltd. as shares of both of the solar manufacturer plunged on Wednesday. While questions remain about whether Hanergy’s panels will gain traction in the market, Yingli is optimistic that its sales will allow it to keep servicing liabilities.
“We believe that we will meet our repayment obligations based on the substantial progress we have achieved to date to secure funds to repay these notes on schedule,” Yingli Chairman Liansheng Miao said in the statement.
Yingli said has repaid 1.2 billion yuan ($160 million) on notes due earlier this month and is confident about being able to make a 1 billion-yuan repayment due on Oct. 13. The chairman along with Chief Financial Officer Dengyuan Song will hold a call with investors at 8:15 a.m. New York time on Wednesday.Yingli’s Decline
Yingli, which was the world’s biggest solar panel maker until last year, fell the most on record on Tuesday in New York, plunging as much as 37 percent after a 12 percent decline the day before. On Tuesday, the company it may bring in strategic investors and issue shares to ease its difficulties, adding that its debts may “adversely” affect its business.
While most of the solar industry is recovering from a plunge in prices that squeezed margins, Yingli is struggling from a strategy that emphasized market share growth over profitability. The company expanded in the past few years to eclipse Suntech Power Holdings Co. and Q-Cells SE as the biggest solar panel supplier then lost its position to Trina Solar Ltd. at the end of last year.
Hanergy works in a different segment of the solar business from the rest of the main suppliers, focusing on thin-film panels that are lighter and traditionally more expensive. Its main competitor is First Solar Inc. of Arizona.Hanergy Questions
For months, Hanergy investors have focused on questions about the popularity of Hanergy’s technology in the market and its accounting practices that mean most of its sales are booked with its closely-held parent company. Its share plunge on Wednesday in Hong Kong followed an annual shareholder meeting that the chairman and founder Li Hejun didn’t attend.
Solar panel prices have declined more than 67 percent since 2010. That bankrupted more than 30 companies including the main subsidiary of Suntech and Q-Cells.
While Yingli’s growth made it popular with project developers, it had “obvious consequences” on the balance sheet, said Jenny Chase, lead solar analyst for Bloomberg New Energy Finance.
Short-term borrowings of about $1.6 billion were on Yingli’s books at the end of last year, and long-term debt stood at $460 million, according to Friday’s filing. It hasn’t reported a profit since the second quarter of 2011.
Yingli Slides Most Ever After Seeking Backers to Ease Debt Yingli Falls on Saying ‘Substantial Doubt’ It Will Continue (2) Hanergy Thin Film Suspends Trading After Stock Plunges 47%
http://www.bloomberg.com/news/articles/2015-05-20/yingli-green-seeks-to-reassure-investors-after-stock-plunge
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Yingli Moves to Calm Investors After Going-Concern Warning
May 20, 2015 | The Wall Street Journal
By Chelsey Dulaney
Yingli Green Energy Holding Co. Ltd. on Wednesday moved to calm investors, saying it will be able to repay its debt on time after issuing a going-concern warning in a regulatory filing last week.
Shares gained 7.5% in premarket trading after falling 44.7% so far this week.
Yingli, a Chinese solar-panel company, said in last week’s filing that “there is substantial doubt as to our ability to continue as a going concern.”
Yingli said Wednesday that the statement has been taken out of context, adding that it has plans to mitigate future risks and challenges.
The company said it repaid some midterm notes that matured on May 3 and said it should be able to meet its other repayment obligations on schedule.
“The company is optimistic about and confident in its ability to continue servicing the global solar market, and feel well-positioned with our quality products and access to capital in order to take advantage of the current surge in solar demand,” Yingli said in a release.READ MORE
Hanergy Plunges 47% as Skies Darken for China’s Solar IndustryChina Speeds Up Solar DriveJA Solar Profit Drops as Cell Shipments Plunge
Yingli expanded quickly and is now weighed down by debt. China’s solar-panel producers have been suffering for years, pummeled by a supply-demand imbalance as the industry expanded while demand slackened in places like Europe due to a weak economy.
Financial Accounting Standards Board updated U.S. accounting rules last August, which go into effect by the end of 2016, defining management’s responsibility in evaluating whether their business will be able to continue operating as a going concern, and make relevant disclosures in financial statement footnotes.Advertisement
Previously, there were no specific rules under U.S. Generally Accepted Accounting Principles, and disclosures were largely up to auditors. Corporate executives had the option to make any voluntary disclosures they felt relevant.
http://www.wsj.com/articles/yingli-moves-to-calm-investors-after-going-concern-warning-1432121642
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Yingli CFO: Downstream business and gradual debt reduction at heart of company’s future
May 20, 2015 | PV Tech
By John Parnell
The “gradual decrease” in debt and cash from its nascent downstream business will be at the heart of Yingli’s long-term future, the company’s CFO has told PV Tech.
Ahead of a conference call for analysts scheduled for this afternoon, Yiyu Wang said press reports on the module maker’s delayed annual report, which identified “serious doubt to continue as a going concern”, had triggered an overcorrection in the share price.
Yingli closed 12% down on Monday and was 36% down at one stage during trading. Shares fell under a dollar on Tuesday. Wang dismissed the reported scale of the problem insisting that the company’s listed status compels it to report risks and that these should not be read as forecasts.
“I'm not talking about the media,” he said. “Journalists have the right to interpret what they read. We only clarify when we see that the market reaction is too much. I can't influence what people read, my job is to tell people what we do want to say.”
Asked what options were available to the manufacturer to tackle its large debt repayments, Wang said declined to give specifics but insisted longer term prospects were good.
“Our company is paying back its debts year by year and the level of our debts will gradually decrease. That means our interest rate expenses will decrease year by year. On the other side we are moving into [the] downstream [market] and will see more margin contribution, and we have cashed out some of our assets that we didn’t use for manufacturing.”
The company met a repayment deadline set for 3 May after selling land rights and expects another windfall from the transaction once the local government sells the plot to developers.
With a 1.6GW project pipeline, the company can expect a boost in cashflow, Wang said. Asked whether the company could support new debt to pay its mid term debt, Wang was bullish.
“Of course we are confident. I think in 2013 we proved we don't have any default issues and at that time the market was even worse. In 2014 we proved it again and we started to recover. In 2015 we will definitely recover further and that is why we are confident,” he said.
In a separate press statement sent out this morning, Yingli said statements in last week's report had been "interpreted out of context" and that it was "optimistic" about its future.
Liansheng Miao, Yingli's chairman and chief executive, said: "While we still have another series of medium term notes in the principal amount of RMB1.0 billion due on October 13, 2015, we believe that we will meet our repayment obligations based on the substantial progress we have achieved to date to secure funds to repay these notes on schedule."
http://www.pv-tech.org/news/yingli_cfo_downstream_business_and_gradual_debt_reduction_at_heart_of_compa
Additional sources :
PV Magazine (German): http://www.pv-magazine.de/nachrichten/details/beitrag/yingli-weist-spekulationen-ber-insolvenzgefahr-zurck_100019234/
Solar Magazine (Dutch): http://solarmagazine.nl/nieuws-zonne-energie/i3577/ex-marktleider-yingli-in-financieel-moeilijk-vaarwater
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