Funding for Polysilicon-Based PV Manufacturers: A Look at Four Companies
SummaryIn this post we will take a look at the future capital needs and funding requirements of four Chinese polysilicon-based PV Manufacturers. Briefly, our conclusion, based on current low cash levels, high outstanding short-term debt as a percentage of total capital, and future capital needs, in the form of outstanding purchase obligations listed in recent 20-F filings, is that nearly all of the companies mentioned here (i.e. TSL, CSIQ, SOLF, YGE) will have a significant weakening of balance sheets in the near term, as short-term debt levels soar to support growing operating cash losses and purchase obligations. The prospect of immediate dilution via direct equity share offerings is clearly remote, as past history shows that these companies prefer to use convertible debt issues, as opposed to straight equity, as a longer-term financing vehicle.
(Please note: Complete spreadsheets, which are updated quarterly, with all of our financial assumptions about the polysilicon-based PV Manufacturers mentioned here, are available to subscribers of Envoy Global Research).
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