LDK Solar Co., Ltd.("LDK Solar") (NYSE: LDK), a leading vertically integrated manufacturer of photovoltaic products, announced that it has signed a purchase agreement with Shanghai Qianjiang Group in which Qianjiang Group has agreed to purchase all shares of LDK Anhui, located in Hefei City, for approximately RMB 25 million. According to the terms of the agreement, Qianjiang Group will release the guarantee LDK Solar provided to LDK Anhui and its subsidiaries within 12 months, as well as compensate LDK Solar for any loss associated with such guarantee, prior to its release.
As of September 30, 2012, LDK Anhui carried consolidated negative net assets of approximately USD 54 million and as of September 30, 2012, total bank borrowings of LDK Anhui and its subsidiaries totaled approximately USD 485 million, with a consolidated asset-to-liability ratio of 107%. LDK Solar anticipates that the divestiture of LDK Anhui will increase LDK Solar’s pro forma consolidated net assets by USD 58 million as well as decrease LDK Solar’s pro forma consolidated asset-to-liability ratio by approximately 1.8%.
"We are pleased to reach this purchase agreement with Shanghai Qianjiang Group for LDK Anhui," stated Xingxue Tong, President and CEO of LDK Solar. “This agreement marks continued progress on our plan to improve LDK Solar’s liquidity and working capital.”