China Comes to Rescue With Yingli Loan 英利获贷款承诺政府终出手相助

By newsdoug on June 3, 2011

After seeing its solar panel makers struggle for the better part of a year in one of their worst ever downturns, Beijing is finally stepping in to help this promising sector that has fallen on hard times. Yingli Green Energy (NYSE: YGE), one of the stronger players, has announced that it’s just received a 5-year, 1.2 billion yuan ($180 million) loan from two Chinese government-controlled banks, Bank of China and CITIC. (company announcement) While the size of this loan isn’t really that big, the broader significance is that China is stepping up to make sure its carefully nurtured solar sector gets the working capital it needs to whether the current industry downturn, that has seen panel prices plunge and inventory accumulate as urgency faded from the global drive to develop alternate energy sources. Readers of this blog will know that earlier this week wind power company Ming Yang (NYSE: MY) had to shelve a secondary offering due to weak market sentiment (previous post), and just before that LDK Solar (NYSE: LDK) had to abandon a debt offering for similar reasons. (previous post). As I’ve said before, what Beijing really needs to do is boost its own drive to install more solar power plants, which would create domestic demand for these companies that now rely almost exclusively on the largess of foreign government subsidies to fuel their sales. But in the meantime, these kind of loans to the healthier solar firms should help them survive the current downturn.

Bottom line: A new $180 million loan for Yingli by Chinese banks shows Beijing is aware of the cash crunch many are facing, with more similar financing is likely in the months ahead.

太阳能行业严重不景气之际，中国太阳能电池板生产商今年挣扎不已，现在中国政府终於出手相助。英利绿色能源<YGE.N>宣布，获得中国银行与中信银行两家共计11.6亿元人民币的五年期贷款。虽然贷款数目不算太大，但其更重要的意义在於，中国政府开始参与进来，确保其精心呵护的太阳能行业获得所需要的运营资金来挺过目前行业颓势。眼下伴随全球发展替代能源迫切性减弱，太阳能电池板价格大挫，库存不断积压。我此前曾在文章中提到因市场情绪低落，中国明阳<MY.N>不得不撤回第二轮增发，而此前江西赛维太阳能<LDK.N>也因类似原因放弃债券融资计划。我之前亦说过，北京真正需要做的是加大太阳能发电厂建设力度，此举可提振国内需求，因目前这些企业严重依赖外国政府的慷慨补贴来推动产品销售。同时，向较为健康的太阳能企业提供此类贷款还可帮助他们度过目前行业颓势。

一句话：中国两家银行向英利提供11.6亿元人民币贷款显示，北京意识到了眼下很多企业面临的资金紧张困局，未来数月可能还会有更多类似融资。