As a part of an ongoing liability management program commenced in September 2013, LDK Solar has explored ways to restructure its highly leveraged balance sheet and reduce its significant cash flow requirements. Following execution of the Confidentiality Agreements, LDK Solar and the Holders have further discussed LDK Solar’s capital structure and various restructuring options proposed by LDK Solar in an effort to achieve a consensual restructuring and to prevent or forestall a liquidity crisis. For the purpose of these discussions, LDK Solar has provided the Holders with the following draft restructuring proposal (the “Proposal”) setting out two options for the Holders, an exchange of securities or a cash-out:
LDK Solar has discussed the terms of the Proposal with holders of approximately 40% in aggregate principal amount of the outstanding Senior Notes and their financial and legal advisors. But the Holders have not signed any agreement with LDK Solar to memorialize any agreed restructuring terms, and the negotiations are continuing. Unless and until the Holders execute a restructuring support agreement with LDK Solar incorporating the terms of the Proposal, they are not contractually bound to support and consummate the Proposal and may continue trading in the Senior Notes, subject to applicable laws.
LDK Solar intends to continue discussions with the Holders on the terms of the restructuring support agreement. There can be no guarantee, however, that LDK Solar will successfully negotiate any restructuring support agreement or, if a restructuring support agreement has been reached, that it will reflect the terms of the Proposal, or achieve all or any of the stated objectives of the proposed restructuring.
LDK Solar does not generally disclose detailed prospective financial information. However, in connection with the discussions with the Holders and their advisors, LDK Solar disclosed certain financial information, consisting largely of forecasts and projections, to the Holders and their advisors pursuant to the Confidentiality Agreements. LDK Solar’s management prepared the forecasts and projections based on certain internal financial projections and their reasonable expectations, beliefs, opinions, and assumptions at the time such forecasts and projections were prepared. The forecasts and projections were not prepared with a view toward public disclosure and were not prepared in accordance with generally accepted accounting principles or published guidelines established by the American Institute of Certified Public Accountants or any other agency for preparation and presentation of “prospective financial information.” Neither LDK Solar’s independent auditor nor any other independent accountants have examined, compiled or performed any procedures with respect to the financial information. Such forecasts and projections were as follows:
The inclusion of the forecasts and projections in this announcement should not be regarded as an indication that LDK Solar or any other person considered, or now considers, this information to be necessarily predictive of actual future results, and does not constitute an admission or representation by any person that such information was or is material, or that the expectations, beliefs, opinions, and assumptions underlying such forecasts and projections remain the same as of the date of this announcement or will remain the same at any time in the future, and you readers are cautioned not to place undue reliance on such forecasts and projections.
Gordon's expertise in the area of industrial energy efficiency and alternative energy. He is an experienced electrical engineer with a Masters degree in Alternative Energy technology. He is the co-founder of several renewable energy media sites including Solar Thermal Magazine.