My speculation is that LDK is receiving additional financial support to keep activities going while they slowly dig their way out of a hole. If LDK's projection is correct (who really knows?), then they will be making money soon and be cash flow positive. Link this with a large upswing in Chinese installs, LDK will hopefully weather the storm.
They seem unable to utilize all their patented work to bring down costs more quickly. That is my hope: LDK brings down costs faster than others and can sell more @ greater profits.
Another wild speculation is that this consortium of banks knows that LDK will be able to produce more product and get larger installs. As someone else said, who puts more people on a sinking ship?
China, the world’s biggest maker of solar panels, will limit construction of new photovoltaic manufacturing plants to curb excess capacity, a move that may spur consolidation within the industry.
New solar plants that “purely” expand capacity will be strictly banned, the Ministry of Industry and Information Technology said in a statement on its website yesterday. Annual spending by companies for research and development and upgrading equipment must total at least 3 percent of revenue and must exceed 10 million yuan ($1.6 million).
Chinese authorities have pledged to cut overcapacity in industries from steel to paper as policy makers seek to reduce the economy’s reliance on investments and exports. A global oversupply of solar panels led to a 20 percent plunge in prices last year, according to data compiled by Bloomberg.
The policy will slow efforts to expand production capacity in favor of mergers and acquisition as a growth strategy for the biggest companies, Angelo Zino, an analyst with S&P Capital IQ in New York, said in an interview.
“They may be able to add capacity without actually building it,” Zino said. “The Chinese government would be more than OK with companies if they joined forces or capacity gravitated toward the tier-one manufacturers.”
Chinese solar companies have the capacity to supply the entire industry, with plenty left over. Were they to run at full speed, China’s factories could produce 49 gigawatts of solar panels a year, 10 times more than in 2008 and 61 percent more than installed globally last year, according to data compiled by Bloomberg. A gigawatt is about as much as what a new nuclear reactor can supply.