China's Yingli enters judicial restructuring process

Yingli Green Energy Holding Co Ltd (OTCMKTS:YGEHY) announced on Tuesday that a court in China has officially accepted the restructuring application of its local unit, which marks the official entry of the company in the judicial restructuring phase.

The debt-laden Chinese solar photovoltaics (PV) maker said in a statement that the Baoding Municipal Intermediate People's Court has appointed an administrator to oversee the restructuring work with the expectation for a restructuring implementation plan to be formulated in the coming months. Pre-restructuring stage tasks have already been finalised.

"With the joint efforts of relevant departments and major creditor banks, the direction and specific plans for the restructuring have been basically determined," stated CFO Yiyu Wang.

The plan revolves around the conversion of a substantial portion of the financial debts of Yingli's major local units into controlling equity interests in said subsidiaries, and paying back parts of the debt. The company pointed out that “there is a good chance” for new strategic investors to be introduced soon.

In addition to placing focus on the restructuring plan, the company will also pursue a rethinking of its business operations model, capacity distribution optimisation, facility production line upgrades and the release of advanced technology reserves.

Yingli concluded that the newly restructured company will see its debt ratio reduced to a medium or low level for the industry, while its cash flow will be "greatly improved".

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