China's Hanwha SolarOne gets $475 mln credit line from Beijing bank
Dec 27 (Reuters) - Hanwha SolarOne Co Ltd said Bank of Beijing Co Ltd will provide it with a credit line of about $475 million, in yet another instance of Chinese banks helping local solar companies survive a steep fall in prices.
Hanwha SolarOne's total long-term debt of 2.76 billion yuan ($442.3 million) is already more than five times its market value, and the company, like many of its China-based rivals, has reported losses for the last six quarters.
The Bank of Beijing credit, which Hanwha SolarOne said will be used to manage and grow its business, can be accessed over the next 12 months.
Hanwha SolarOne's stock rose 8 percent to 95 cents in premarket trading on Thursday. Shares of the company, a unit of South Korea's Hanwha Group, have fallen by a fifth over the past year.
State-run banks in China have extended billions of dollars of credit to their solar firms over the past three years, sparking a European Commission probe into subsidies for Chinese companies.
Suntech Power Holdings Co Ltd and LDK Solar Co Ltd are some of the other Chinese solar companies to have received loans from local governments in recent months.
"This acts as a temporary relief for these companies," said Thiemo Lang, a senior portfolio manager at Sustainable Asset Management in Zurich.
"(The loans) enable them to sell their modules into the state-owned projects - in an environment where private project developers are becoming increasingly wary to purchase solar module from companies of rapidly deteriorating balance sheets," he said.
China's official Xinhua news agency reported earlier this month that the country has added a further $1.1 billion in subsidies to its solar power sector, more than doubling its support this year.