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UPDATE 3-LDK Solar in talks with investors, shares hit new low
* In talks with strategic investors in face of losses, global glut
* Second quarter loss nearly tripled from year earlier
* Cuts FY rev outlook to $1.1-$1.5 bln from $1.5-$2 bln
* Sees third-quarter rev $220-$260 mln vs est. $453.6 mln
* Shares hit record low
By Swetha Gopinath
Sept 17 (Reuters) - China-based solar equipment manufacturer LDK Solar Co Ltd said it was in talks with potential investors as it downgraded sales forecasts in the midst of a glut that has pummeled the solar power industry.
The weak outlook sent LDK shares down 5 percent to an all-time low of $1.18 on Monday. The stock, which was listed on the New York Stock Exchange in 2007, has lost about three-quarters of its value in the last year.
The severe glut in solar equipment has led to a near two-year slump in panel prices and erased profits across the sector.
Chinese solar companies have also been hit by anti-dumping duties imposed by the United States and they may face similar tariffs in Europe, their largest market.
The company was looking to raise funds and may sell a strategic stake, CEO Xiaofeng Peng said on a conference call with analysts, after unveiling a second-quarter loss nearly three times as high as a year earlier.
"In the past few months we've had in-depth discussions with several companies and few of them have shown a significant interest in taking a strategic investment position in the company," he said, adding that the company had not received any offer yet.
With debts mounting at Chinese solar companies, expectations are rising that many will be forced to seek a new infusion of funds through takeovers or mergers.
LDK has one of the most stretched balance sheets in the industry, analysts say. The company said it ended the second quarter with $296.2 million in cash and cash equivalents and $523.4 million in short-term pledged bank deposits.
LDK, which has already cut more than 5,000 jobs this year, laid off 3,884 more employees in the second quarter, but said it did not see a further significant reduction in numbers.
Europe and the United States are objecting to billions of dollars in credit lines and other support that China has provided to its solar industry through state-run banks.
In July, the government of Xinyu city, in Jiangxi province, said it would use taxpayer funds to repay some company loans.
China has provided billions of dollars in credit lines and other support to its solar industry through state-run banks.
LDK said it raised about $50 million to $60 million by selling properties and land use rights to local government authorities during the second quarter. It recorded a $30.5 million loss on the sale.
LDK, which makes polysilicon, solar wafers, cells and modules, cut its revenue forecast for both the current quarter and the year.
It said it expects third-quarter revenue of $220 million to $260 million. Analysts on average had expected $453.6 million, according to Thomson Reuters I/B/E/S.
The company forecast current-quarter wafer shipments of between 190 megawatt (MW) and 240 MW, much below the 316.7 MW it shipped in the second quarter.
LDK expects to ship between 140 MW and 180 MW of cells and modules in the third quarter, compared with second-quarter shipments of 135.6 MW.
The company cut its full-year revenue forecast to a range of $1.1 billion to $1.5 billion from its prior outlook of between $1.5 billion and $2.0 billion.
LDK's second-quarter net loss rose to $254.3 million, or $2 per American depository share (ADS), from $87.7 million, or 62 cents per ADS, a year earlier.
Quarterly net sales plunged 53 percent to $235.4 million.
Rival Suntech Power Holdings Co Ltd, the world's largest solar panel maker, said on Monday it temporarily shut a portion of its solar cell production capacity in China.
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