(Bloomberg) — Yingli Green Energy Holding Co., the world’s
biggest solar panel maker until last year, fell the most on
record after saying it’s seeking investors to help cope with $2
billion of debt that’s threatening its ability to remain
Yingli dropped 42 percent to 86 cents at 9:53 a.m. in New
York. Earlier it plunged as much as 52 percent, the most
intraday since its June 2007 public offering.
The Chinese manufacturer said it’s confident it can repay
its liabilities, which include $1.6 billion in short-term loans.
In an e-mailed statement Tuesday, Yingli said it’s looking for
partners that can take additional shares as well as a strategic
Yingli warned in a filing Friday that there’s “substantial
doubt” it can remain afloat, and the shares dropped 12 percent
“Potential risks don’t mean they will happen and don’t
mean Yingli is facing or will face such risks,” Wang Yiyu,
Yingli’s chief financial officer, said in the statement Tuesday
from the company’s Baoding, China, headquarters. “They
shouldn’t cause an overreaction.”
While competitors led by Trina Solar Ltd. snap back from a
solar slump that dragged down prices and gutted margins across
the industry, Yingli has remained unprofitable since the second
quarter of 2011.
“Our substantial indebtedness and net loss may adversely
affect our business, financial condition and results of
operations, as well as our ability to meet our payment
obligations,” Yingli said in the filing on Friday. The company
also had long-term debt of $460 million at the end of last year.
Yingli was the biggest panel maker in 2013 and slipped in
2014 after Trina’s panel shipments reached 3.66 gigawatts, 8.9
percent more than the 3.36 gigawatts Yingli delivered.
“The firm’s reputation is for very low cost at its
manufacturing base well away from the major cities, and for
compromising on margin to sell volume,” said Jenny Chase, lead
solar analyst for Bloomberg New Energy Finance. That “makes it
popular with project developers, but has obvious consequences
for the balance sheet.”
Solar panel prices have declined more than 67 percent since
2010. That bankrupted more than 30 companies including the main
subsidiary of Suntech Power Holdings Co. and Q-Cells SE, which
were the top solar suppliers before Yingli took the lead.
While competitors such as Trina and JA Solar Holdings Co.
focused on profit, Yingli concentrated on market share to
maintain its size in the midst of an industry shakeout. Now,
rising demand for panels is reviving profit at most solar
“Solar cell and panel manufacturing has become more
concentrated as prices have fallen,” Yin Lei, a Shenzhen-based
analyst at China Merchants Securities Co., said by phone.
“Companies with more liabilities and weaker cost controls will
be eliminated,” while top manufacturers with the lowest costs
will benefit from the growth in demand, he said.
China’s government, which invested heavily in the industry
in the past decade, more recently has sent mixed signals about
its willingness to support solar.
President Xi Jinping boosted targets for installations this
year while authorities also sought to eliminate outdated
capacity and encourage companies to consolidate through mergers
or restructuring. The government also allowed Baoding Tianwei
Group Co. to default on bond payments last month, a first by a
state-owned company in China.
Baoding Tianwei, also based in the northern city of
Baoding, failed to pay 85.5 million yuan ($13.8 million) of bond
interest in April.
To contact the reporter on this story:
Justin Doom in New York at
To contact the editors responsible for this story:
Reed Landberg at
Will Wade, Robin Saponar