LDK Solar solicits consents from holders of 10% notes due 2014

By Jennifer Chiou

New York, Dec. 12 - LDK Solar Co., Ltd. announced the start of a consent solicitation for its 10% senior notes due 2014.

The company is looking to amend the indenture to obtain additional flexibility for its liquidity and capital restructuring plan.

The solicitation will end at noon ET on Dec. 21.

LDK is offering a consent fee of RMB 10 for each RMB 10,000 principal amount of the notes. It is seeking consents from holders of a majority of the notes.

The company said earlier that it is continuing to work to address liquidity and working capital concerns, and it has engaged Citigroup to assist in the process of discussions with certain creditors.

LDK Solar added in a news release that it is seeking consents to also enhance its ability to take necessary actions to improve liquidity and increase cash flow under current challenging market conditions.

The company's proposed amendments, among others, include the following:

• Change the limitation on debt and preferred stock covenant to add a further category of permitted debt that will permit LDK Silicon & Chemical or its subsidiary to issue up to $200 million of another series of redeemable convertible preferred shares for the purpose of settling certain accounts payable owed to vendors or suppliers of LDK Solar's Chinese subsidiaries;

• Add a further category of permitted debt that will allow guarantees by any restricted subsidiary of amounts that are owed by a disposed restricted subsidiary following the transfer of a majority or all of the stock of that disposed restricted subsidiary to creditors or investors in exchange for the forgiveness or assumption of some or all of the debt;

• Establish another category of permitted debt that will allow LDK Solar to incur up to an aggregate principal amount of $350 million to fund the ramp-up of production of polysilicon, solar wafers, cells and modules; and

• Include the series A redeemable convertible preferred shares issued by LDK Silicon & Chemical in June 2011 as indebtedness that may be refinanced with permitted refinancing debt.

The company is also looking to change the definition of change of control to remove the provision that if permitted holders beneficially own, directly or indirectly, in the aggregate less than 35% of the voting stock of LDK Solar, that circumstance would cause the change of control.

LDK further wants to potentially extend the mandatory redemption date of the series A preferreds to beyond June 2013.

The Bank of New York Mellon, London Branch is the trustee and paying and transfer agent (212 493-6996 or 800 290 6431). Citigroup Global Markets Asia Ltd. is the solicitation agent (852 2501 2552).

LDK Solar is a Xinyu City, China-based producer of solar wafers and photovoltaic products.

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