Plans don't always keep up with change. Just two months after the announcement of the "Debt Restructuring Agreement" between Xinda Xinzi and Jiangxi LDK, the so-called "unbreakable" repurchase terms have now undergone a major shift.
Xindaxin Materials officially announced today that it has signed a strategic cooperation agreement with Jiangxi Levi, which cancels the previous repurchase clauses and states that after the six-year lease period ends, LDK Solar will no longer have the right to buy back three solar power stations from the company. Instead, Xindaxin Materials will retain the right to transfer or dispose of the facilities once the lease expires.
In the current challenging environment for the photovoltaic industry, Jiangxi Levi, a leading solar silicon wafer slicer, has suffered significant losses and faced repeated financial strains. This crisis had a ripple effect, impacting several downstream listed companies, including Beijing Express and Xindaxinxin. In June, due to the spread of the LDK crisis, Beijing Yuntong terminated a nearly 1.2 billion yuan contract with the company. Later, Beijing Express turned against LDK, filing an arbitration claim with the Shanghai Arbitration Agency for over 100 million yuan in breach of contract damages.
Faced with this situation, Xindaxin Materials proposed a debt-recovery plan by using the three solar power stations owned by Jiangxi LDK to offset outstanding receivables. On October 25, the company announced that Jiangxi LDK planned to transfer the three solar rooftop power plants to Xindaxin Materials, offsetting 140 million yuan in debts. The company then leased the three power stations to Jiangxi Saiwei for six years at an annual rent of 9.9 million yuan. LDK had the option to repurchase the facilities within that time, but if not, it would be required to do so within one month after the lease ended, with the repurchase clause being irrevocable.
However, on Tuesday, Xindaxin Materials revealed that both parties agreed to cancel the repurchase terms. According to the updated agreement, if Jiangxi LDK has the financial capability to repurchase during the lease term, the two sides will negotiate a separate repurchase agreement. If LDK fails to repurchase the power station within the lease period, Xindaxin Materials, as the owner, will have the right to transfer or otherwise dispose of the facility after the lease expires.
Sources within Xinda Xinzi told reporters that in the context of national policies supporting photovoltaic companies and the growing market potential for power station assets, the decision to cancel the repurchase terms is mutually beneficial.
That said, there are some concerns. The three solar rooftop power stations are all located on the roofs of LDK Solar's facilities—two on the roof of Phase III, and one on the roofs of Phases I and II. These installations are closely tied to LDK’s operations. If they are transferred or used independently, it could lead to logistical challenges. As a result, what was initially a debt-repayment strategy has now become a potential burden for Xinda Xinzi.
To address this, Xindaxin Materials included two key conditions in the new strategic cooperation agreement: First, LDK promised to prioritize purchasing raw materials and auxiliary products from Xindaxin Materials under the same quality and price conditions. Additionally, LDK guaranteed that at least 70% of its annual material purchases would come from Xindaxin before the full lease payments are made. Second, LDK committed to sending at least 70% of the waste mortar generated from its cutting process to Xindaxin for recycling.
According to insiders, these provisions are expected to strengthen Xindaxin’s sales of crystalline silicon wafers and boost its efforts in recycling and reusing waste materials.Led Spot Light,Downlight Spot Light,Spot Light Aluminum,Store Spot Light
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