* LDK eyes acquisitions, partnerships -CFO
* Credit agreement will help with short-term debt
* Company may step up move into solar modules, cells
(Revises first sentence, adds comments from CFO interview,
adds closing share price, other details)
By Sarah McBride
LOS ANGELES, Sept 27 Solar-wafer maker LDK
Solar Co Ltd LDK.N is hunting for acquisitions and
partnerships, aided by a 60 billion yuan ($8.95 billion) credit
agreement with China Development Bank.
The company, whose shares rose 18 percent on Monday on news
of the credit agreement, is scouring the globe "for
opportunities to increase capacity, increase market share, or
lower costs," Chief Financial Officer Jack Lai said in an
The company is looking in Asia, Europe and the United
States, but has not yet "seen a good fit," Lai said.
LDK Solar has a sizable war chest as a result of the credit
agreement. Some analysts say it should pay down its debt before
focusing on acquisitions.
The company will use part of that amount to deal with more
than $1 billion in short-term debt that comes due next year. It
will likely move those obligations into longer-term loans, Lai
Still, that gives LDK Solar plenty of cash for other
The company could build on existing downstream expansion
plans, Lai said. It is increasing its solar module operations
to 2.5 gigawatts, as previously announced, and its solar-cell
operations to 1.24 gigawatts. Solar wafers and solar cells are
components of solar modules.
The credit agreement is the largest in a series of loans
dished out by the bank this year to Chinese solar manufacturers
such as Suntech Power Holdings Co Ltd STP.N and Trina Solar
Investors, who had previously worried about LDK's debt
deadlines, sent its stock up to a 13-month high at $10.50 on
the New York Stock Exchange on Monday. The stock ended at
$10.45, up 18.1 percent on the day.
Some analysts think LDK still has room to grow.
"Consensus estimates are way too low for LDK," said Ahmar
Zaman, an analyst at Piper Jaffray who initiated coverage of
the stock with an "overweight" rating last week.
Zaman thinks the company's expansion plans and continuing
pricing strength for solar wafers will help LDK brighten its
Others disagree. The rise in LDK's share price is overdone,
said Gordon Johnson, head of alternative energy research at
Axiom Capital Management.
He said LDK's costs in manufacturing wafers are higher than
those of competitors, and a shortage in solar modules could
become a glut, affecting prices for components such as solar
On Monday, HSBC cut the Asian solar sector to
"underweight," citing subsidy cuts in Europe, which it said
would push down prices and margins.
LDK Chief Executive Xiaofeng Peng said in a statement that
the five-year credit agreement would help the company
strengthen its position in photovoltaics. "We will have an
enhanced ability to pursue our long-term growth strategy," Peng
Heavy support from Beijing for clean energy has angered
some in the United States, where government backing is much
Earlier this month, the United Steelworkers union filed a
petition with the U.S. Trade Representative's office seeking
action against what it called illegal Chinese practices that
threatened U.S. jobs in the clean energy area. [ID:nN09121928]
(Reporting by Sarah McBride in Los Angeles and Sakthi Prasad
in Bangalore; Editing by Hans Peters, Gerald E. McCormick and