NEW YORK (AP) — Shares of LDK Solar Co. rose Thursday on news that China Development Bank Corp. agreed to loan it nearly $70 million.
THE SPARK: The struggling Chinese solar company said it will use the money to upgrade the technology at its Mahong polysilicon plant.
THE BIG PICTURE: LDK, like other solar companies, has been hurt by a drop in demand and prices for solar products. It hasn't posted an annual profit since 2010 and analysts polled by FactSet expect revenue in 2012 was less than half of the 2011 level.
LDK, which makes, solar wafers, cells and modules, said the financing will mainly be invested in hydrochlorination technology, which will lower the manufacturing cost of silicon production at the plant.
LDK said that it has so far invested about $1.9 billion in the plant, adding that the investments are the main reason for the company's high level of debt.
THE SHARES: LDK shares rose 10 cents, or 6.5 percent, to $1.64 in heavy afternoon trading, after peaking at $1.70 earlier in the day. In the past 52 weeks, the shares have traded between 71 cents and $6.92.
Over the past year, the shares have lost about two-thirds of their value.