Some of the last title reflect an appetite for cooling by foreign banks for the financing of associate solar energy projects, creating a worrisome gap that Beijing may need to fill as it seeks to stop at the outlets to flow further still. Two of last securities resemble particular cause for concern, with Canadian Solar (Nasdaq: CSIQ) that supports the financial liability for a solar power project of one of its partners in the construction, for unspecified reasons, which I think are related to the declining interest by foreign banks in the financing of projects. Another similar recent national media report , said that a Chinese company which handles the sale of solar panel comes to its largest ever payment of JA Solar (Nasdaq: JASO) after the Panel Maker could not collect payment of a customer abroad.
Both of these news appear to point to the fact that foreign banks quickly lose their appetite for the financing of new construction of solar power plant outside China. Which could lead to a sharp slowdown rapid construction of new projects and create more headaches for the already saturated area.
In the meantime, I would be remiss not to mention the latest news of the insolevent largely LDK Solar (NYSE: LDK), including the rescue plan by a State and control took another step forward with the "sale" of one of its assets more problematic in what appears to be a State entity.
Let's start this solar overview with a look at recent news related to abroad that can point to the rapid evaporation of financing for new solar energy projects in European and North American markets. A report has Canadian Solar, one of the major China Solar Panel manufacturers, announced it bought 2 solar energy under construction projects in Canada by a company called SunEdison for approximately 38 million $.
This type of relationship has become commonplace in the sector over the past years, with the leaders of group as Canadian Solar often work closely with the manufacturers of the plant such as SunEdison to build new projects. In these cases, the manufacturer of the plant as SunEdison gets funding for the project, and then he built the factory with provided by its partner, in this case, Canadian Solar panels. When the project is completed, the Panel provider then in general help the manufacturer find a buyer for the project long term.
But in this case, SunEdison apparently sold the 2 projects to Canadian Solar to halfway in the process of building rather than waiting for the projects is complete, putting an unwelcome new financial burden on Canadian Solar. It's hard to know what has led to this result, but I suspect that SunEdison had difficulties financing the operation, perhaps because of the waning interest of its lenders of.
Skip to the JA Solar case, Chinese media say an insurer recently granted the company a record 5 million amount $ in compensation after a buyer abroad doesn't have to pay for the panels that he received from JA. The report contains no details on who was the buyer, or why the reason for the default value, but it point out that the market has taken a strongly negative turn recently to Chinese companies that sales of panels abroad.
Finally, let's take a look to the LDK, which announced the sale of its of Anhui LDK to a company based in Shanghai which I think is owned by the State and acting on the orders of Government. The buyer, Shanghai Qianjiang Group, buys LDK Anhui for 25 million yuan, while Anhui LDK has negative net assets of 54 million $ 485 million and $ in Bank loans outstanding.
The sale will improve balance of the LDK in releasing this problematic because the company is slowly saved by Beijing in this type of assistance by a State which will eventually see the company supported by the Government. Locate the LDK bailout decided by the States to continue and similar deals to follow for other manufacturers, with cooling of interest from foreign banks to fund projects of the solar sector only increase dependence on industry funding of Beijing.
Bottom line:New developments indicate the foreign banks could lose their appetite for the financing of the sector of the solar energy that are struggling, put a burden yet plu in Beijing to bail out the industry.
Main image: the Chinese currency through Shutterstock
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