UPDATE 1-LDK Solar says China Dev Bank approves $71 mln loan

Thu Jan 31, 2013 1:34pm EST

Jan 31 (Reuters) - LDK Solar Co Ltd said China Development Bank Corp approved a loan of 440 million yuan ($71 million), adding to the billions of dollars Chinese state-run banks have already provided to support the country's solar industry.

LDK shares were up 8.4 percent at $1.67 in afternoon trading on the New York Stock Exchange.

The loan will be used to finance LDK's investment in hydrochlorination technology for the Mahong polysilicon plant in Jiangxi province, in which LDK has invested more than 12 billion yuan to date.

LDK said last month that it was working to address liquidity and working capital concerns and entered into discussions with certain creditors to obtain additional flexibility.

The company plans to draw down on the loan as market conditions improve and the necessary equipment is ready for its use, it said on Thursday.

The government of Xinyu city in Jiangxi province said in July it would repay some loans of the company, which is based in the city.

The company early last week said it would sell a 12 percent stake to Fulai Investments Ltd (FIL) for $31.1 million.

FIL, whose sole director and shareholder is Hong Kong-based Cheng Kin Ming, is primarily in the investment business.

As per the deal, FIL can designate two non-executive directors to the LDK board upon closing, which is expected before Feb. 28.

LDK sold a 19.9 stake to state-backed Heng Rui Xin Energy in October.

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