NEW YORK (
) -- Shares of Chinese solar company
are popping on Monday, a slow morning for solar stocks in general, but a 52-week high for the Chinese solar wafer king.
Early on Monday, LDK Solar announced that it has received a loan guarantee package of close to $9 billion ($8.9 billion to be exact), from the China Development Bank.
LDK Solar shares were up close to 10% early on Monday morning and its average daily volume of 3 million shares had already been eclipsed, with more than 4 million shares of LDK Solar in play in the first hour of trading.
The news should not come as a big surprise, given recent loan packages doled out by the China Development Bank. The Chinese bank has more or less provided huge loans to all the important publicly traded Chinese solar companies, from the wafer stage through module production.
Earlier this year, the China Development Bank provided loan packages to the leading solar module companies from China,
More recently, the Chinese Development Bank announced a loan package for
, the biggest solar cell company in China. JA Solar received $4 billion.
With the $8.9 billion loan package for LDK Solar, the China Development Bank has made sure that China's biggest solar wafer maker isn't left a beggar.
It's a bullish time for solar generally, and last week was no exception, as solar stocks outpaced the market gains. Yet for all the individual gains made by solar stocks, a one-day gain the type of which LDK Solar was receiving on Monday is likely to be followed by a stock pullback. Last week,
( SPWRA) skyrocketed by 10% on one day, but suffered the inevitable selloff after its big day, and after two analysts downgraded the U.S. solar stock to hold after the 10% rally.
LDK and JA Solar are both now in the module business as well, but their core strengths have been in wafer and cells, respectively.
LDK may need the China Development loan package more than any other company, too, with what is often described as the worst balance sheet in the solar industry. LDK has a convertible coming due for cash repayment as of next April, as well as a cash balance that continues to arguably be too small for its commitments.
LDK Solar is pushing out along the solar supply chain, moving into modules with a recent acquisition while also moving in the other direction, building out a major polysilicon production plant, which has been a major drain on resources. LDK sold a 15% stake in the polysilicon plant earlier in the year.
The LDK solar loan package brings the loan guarantees doled out by the China Development Bank to the top five Chinese solar stock to roughly $25 billion this year.
Trina Solar received just under $4 billion. Suntech received a loan package of over $7 billion, while Yingli received loan offers of up to $5.3 billion
--Written by Eric Rosenbaum in New York.
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