Dec 27 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
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,"
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.