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Consent Solicitation In Relation To 10.00% Senior Notes Due 2014

Stocks in this article: LDK

XINYU CITY, China and SUNNYVALE, Calif., Dec. 14, 2012 /PRNewswire/ -- LDK Solar Co., Ltd. (the " LDK Solar") (NYSE: LDK), a leading vertically integrated manufacturer of photovoltaic (PV) products, today announced a solicitation of consents (the " Consent Solicitation") to proposed amendments (the " Proposed Amendments") to the Indenture, dated as of February 28, 2011 (as supplemented or amended to the date hereof, the " Indenture"), by and between LDK Solar, the Subsidiary Guarantors (as defined therein), The Bank of New York Mellon, London Branch, as trustee and paying and transfer agent, and The Bank of New York Mellon ( Luxembourg) S.A., as registrar, governing its 10.00% Senior Notes Due 2014 (ISIN No. XS0592597099, CUSIP No. 059259709) (the " 2014 Notes"). The Consent Solicitation will be subject to the terms and conditions set forth in the consent solicitation statement (as the same may be amended or supplemented, the " Consent Solicitation Statement") dated December 14, 2012. Unless otherwise defined herein, capitalized terms used in this announcement have the meanings set forth in the Indenture.

LDK Solar is seeking to amend the Indenture to give it more flexibility to pursue certain actions in its liquidity and capital restructuring plan and to enhance its ability to take necessary actions to improve liquidity and increase cash flow under current challenging market conditions.

The background and a summary of the Proposed Amendments are set out as follows:

  • amend the Limitation on Indebtedness and Preferred Stock covenant to:
    • add a further category of Permitted Indebtedness that will permit LDK Silicon & Chemical or its Subsidiary to issue up to US$200 million of a further series of redeemable convertible preferred shares (the " Series B Preferred Shares") for the purpose of settling certain accounts payable owed to vendors or suppliers of LDK Solar's PRC subsidiaries;
    • add a further category of Permitted Indebtedness that will allow Guarantees by any Restricted Subsidiary of amounts that remain owed by a Disposed Restricted Subsidiary (as such term would be defined by the Proposed Amendments) following the transfer of a majority or all of the Capital Stock of such Disposed Restricted Subsidiary to creditors or investors in exchange for the forgiveness or assumption of a portion or all of the outstanding indebtedness of such Disposed Restricted Subsidiary and/or the transferring Restricted Subsidiary;
    • add a further category of Permitted Indebtedness that will allow LDK Solar to incur up to an aggregate principal amount of US$350 million, with limits on the maximum aggregate amount that can be Incurred and outstanding for each business line and during each quarter, to fund the ramp-up of production of polysilicon, solar wafers, cells and modules and to fund EPC services and solar farm projects;
    • include the series A redeemable convertible preferred shares (the " Series A Preferred Shares") issued by LDK Silicon & Chemical in June 2011 as Indebtedness that may be refinanced with permitted Refinancing Indebtedness;
    • amend the maximum principal amount that can be Incurred and outstanding at any time as Purchase Money Indebtedness and Capitalized Lease Obligations from 10% of Total Assets to a maximum aggregate principal amount of US$780 million. To date, LDK Solar has Incurred and has outstanding approximately US$660 million of Purchase Money Indebtedness and Capitalized Lease Obligations. The additional amounts would be used to finance the installation and construction of property, plant and equipment to improve efficiency at LDK Solar's polysilicon, solar wafer, cell and module facilities; and
    • increase the maximum amount of permitted working capital Indebtedness to US$125 million from US$75 million to allow LDK Solar to continue to fund payments of outstanding payables, interest expenses, research and development expenses and miscellaneous operating expenses at LDK Solar's production facilities;
  • amend the Limitation on Restricted Payments covenant to:
    • allow LDK Solar to pay any dividend or other distribution on the Series B Preferred Shares, provided that LDK Silicon & Chemical and all other Subsidiaries within the Polysilicon Group are Restricted Subsidiaries at the time of such distribution; and
    • o   clarify that the calculation of the aggregate amount of Restricted Payments will exclude any permitted dividends or distributions with respect to the Series B Preferred Shares in the same manner as dividends or distributions with respect to the Series A Preferred Shares currently outstanding;
  • amend the Limitation on Asset Sales covenant to:
    • remove the requirement that LDK Solar be able to Incur at least US$1.00 of additional Indebtedness under Section 3.8(a) of the Indenture when conducting an Asset Disposition;
  • amend the Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries covenant to:
    • allow for any restrictions imposed on the payment of dividends or other distributions on the Common Stock of LDK Silicon & Chemical or its Subsidiary by the terms of the Series B Preferred Shares in the same manner as the Series A Preferred Shares currently outstanding;
  • amend the Event of Default provision to:
    • limit the circumstances that would give rise to an Event of Default under Sections 6.1(a)(5), (a)(6) and (a)(8) of the Indenture to the case of a default, failure to satisfy judgment(s), or bankruptcy or insolvency proceedings by LDK Solar or any Significant Subsidiary (as such term would be defined by the Proposed Amendments);
  • the definition of Change of Control to:
    • remove the provision whereby if the Permitted Holders beneficially own, directly or indirectly, in the aggregate less than 35% of the Voting Stock of LDK Solar such circumstance will give rise to a Change of Control;
  • amend the definition of Permitted Investment to:
    • allow Investments equal to the Fair Market Value of the Capital Stock of any Disposed Restricted Subsidiary (as such term would be defined by the Proposed Amendments) held by any Former Holding Company (as such term would be defined by the Proposed Amendments) immediately following a sale or disposition of Capital Stock which results in such Disposed Restricted Subsidiary ceasing to be a Restricted Subsidiary;
    • allow Guarantees by a Restricted Subsidiary of Indebtedness of a Disposed Restricted Subsidiary in connection with transactions in which one of LDK Solar's Restricted Subsidiaries agrees to transfer a majority or all of the Capital Stock of a Disposed Restricted Subsidiary in exchange for the forgiveness or assumption of a portion or all of its outstanding debt obligations and/or the outstanding debt obligations of such Disposed Restricted Subsidiary;
    • allow for the redemption of the Series A Preferred Shares of LDK Silicon & Chemical from the proceeds of permitted Refinancing Indebtedness; and
  • amend the definition of Polysilicon Subscription Agreement to:
    • account for the potential extension of the mandatory redemption date of the Series A Preferred Shares issued by LDK Silicon & Chemical beyond June 2013.




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