LDK Solar’s ChinaCo restructuring lessons

Author: Ashley Lee | Published: 16 Dec 2014

The US Bankruptcy Court-approved prepack of China’s LDK Solar completed last week.

It marks the end of a lengthy restructuring process for over $700 million of offshore claims, and serves lessons for restructuring ChinaCo offshore debt.

The cross-border reorganisation involved schemes of arrangement sanctioned by Hong Kong and Cayman Island courts, as well as the US prepackaged plan under Chapter 11 for LDK Solar’s three US subsidiaries. It’s believed to be the first judicially approved, multi-jurisdictional debt restructuring of its kind for a China-based entity.

LDK is the country’s latest solar cell manufacturer affected by overcapacity in the sector. Others, most famously Suntech, have restructured in the past year.

Timothy Li, partner at Sidley Austin who advised LDK Solar, said that there are lessons to...