Xiaofeng Peng, the founder, shareholder and CEO of LDK solar, is now facing his personal bankruptcy proceedings forced by Apollo Investment Asia Limited. According to SEC filing made by liquidators in Cayman Islands, where LDK’s company registered, Peng’s personal debt may be as much as US$75.5 million.
LDK’s financial position is not optimistic because the joint liquidators have filed a debt over US$ 4.8 billion, which included a caveat that the company has several off-balance-sheet liabilities as well as contingent claims, PV Tech reported. Last year, Best Solar, a subsidiary of LDK New Energy controlled by Peng, was forced to pay a US $40.8 million receivable. However, a corresponding payable due to Best Solar from LDK Solar of US $21.1 million is unpaid until now. Because of the pending bankruptcy processing, lack of founds and other factors like accountancy, LDK is not expected to announce its financial report for 2013.
Along with LDK’s debts, Peng’s bankruptcy crisis comes from Apollo’s petition. According to PV Tech, Apollo started to invest in LDK Silicon & Chemical Technology since 2012. However, Apollo claims Peng’s breaches under documents governing “Preferred Obligations” under Apollo’s purchase of preferred shares that totaled US$64.4 million. Being an investment arm of China Construction Bank Corporation, Apollo therefore forced Peng to undergo the bankruptcy proceedings, and the initial court hearing would be held in China on May 30th, 2014.
Besides, LDK solar’s first court hearing in the Cayman Island is set on April 2nd with re-engaged KPMG, and all procedures would obey SEC’s rules.