American Apparel issued 200+ million of senior secured notes due 2020 at 13% in March. That company was close to bankruptcy last year, but is profitable now that the economy is turning. I think the high interest rate is mainly a reflection of Xin's business risk - it is not diversified geographically at this point. That can change with them building in the US, so as long as they use the money to actually diversify their business I think this was a good move for shareholders in the long-term. If not, I'd agree that this company is fishy - we will see in a couple of month.
This is definitely a good question to raise and I don't like the move either. I bought 600 shares last week when the market took a hit and am potentially selling out of Xin altogether soon. I took most of my money from Xin and allocated it towards LLEN a few weeks back and so far I'd definitely say that was a great move. LLEN has been ripping and their board members are a lot more established. They are also an American company.
I guess they need the money to build in the US and pay the dividend. Because it is not easy to get money out of China, as Gurnee would claim. But, wait - isn't the holding company a Cayman Island company? None of this makes sense.