We wanted to address some of the recent news reports about our financial health. As you might have read, the press articles are citing our Annual Report, form 20-F. For the first time in the report, we used the language that there is “substantial doubt” with our status as a “going concern”, which is what the media is broadcasting.
We believe that although the report is accurate, there is no cause for concern. We are very confident in our ability to operate, and as a valued customer, we want you to understand the background story:
New auditors: We just switched audit firms from KPMG to PriceWaterhouseCoopers (PWC) prior to this annual report, which was a major cause for the delay in our filings as PWC had to learn and scrutinize our business.
We are (and have always been) a “going concern”: A “going concern” is defined as a business that “functions without the threat of liquidation for the foreseeable future, usually regarded within a 12 month period.” The current issue is that PWC has stringent standards about verifying our debt repayment plan over a set timeframe and requires much analysis, which we’re in the process of doing now. We believe the doubt raised around this topic will be eliminated soon.
Large polysilicon land payment: As we have publicly stated, we have been working to reduce our debt for many years, and we had a major announcement a few weeks ago around selling some land rights to our polysilicon plant. That was very positive given the size of the deal. With the proceeds from the sale of land, we were able to pay off a significant part of our debt earlier than what was scheduled.
New strategic business initiatives: In addition to the polysilicon plant land, we are continuously looking to rationalize our business by selling assets that are not being fully utilized (such as land at other factories), and investing in new businesses (downstream development work in China, among other plans). This type of internal asset review has been ongoing, and is a common business practice. This is all very positive to auditors and analysts.
In summary, we have already paid down a portion of our debt, and we are continuing to do so. We are in good standing with our Chinese investors, have access to capital, a strong path to debt reduction, and a very high-performing quality product.
I hope this explanation proves beneficial, and that you will relay our confidence. Please feel free to reach out to me with any additional questions or feedback.
I would like to thank you for your ongoing support and relationship with Yingli Sub Sahara Africa.
Christopher Steinbach Managing Director
Yingli Solar SubSahara Africa (Pty) Ltd
Yingli Green Energy Holding Company Limited (NYSE: YGE) is the world’s leading solar energy company and the world's largest vertically integrated photovoltaic manufacturer. Headquartered in Baoding, China, the company has more than 22 subsidiaries and over 30 000 employees, the company has supplied over 13GigaWatts globally.
Yingli Green Energy Sub Sahara Africa Pty Ltd (YGESA), a subsidiary of Yingli Green Energy Holding Company Limited, is a legally registered private company in South Africa.
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