Yingli plunges after saying it doubts its ability to survive

May 19, 2015 08:52
Yingli Green Energy says its huge debt may adversely affect its operations and undermine its ability to remain in business. Photo: Internet

Yingli Green Energy Holding Co., the world's second largest solar panel maker, plunged to its worst close in more than seven weeks after saying there’s “substantial doubt” about its ability to remain in business.

The stock lost 12 percent to US$1.49 at the close in New York, the most since March 25, according to Bloomberg.

On Friday, the Chinese manufacturer said in a filing that “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 had short-term borrowings of about US$1.6 billion at the end of last year and long-term debt of US$460 million, according to the filing.

It has not reported a profit since the second quarter of 2011.

“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.”

Yingli was the biggest panel maker in 2013 and slipped in 2014 after Trina Solar Ltd. shipped 3.66 gigawatts of panels, compared with Yingli’s 3.36 gigawatts.

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