SHANGHAI — President Xi Jinping’s clean-energy strategy is suffering more growing pains as China’s renewables companies face record bond repayments and Sinovel Wind Group Co. said it may struggle to meet obligations.
The industry must repay $4.6 billion of notes in the second half, up from $3.5 billion in the previous six months, data compiled by Bloomberg show. Turbine-maker Sinovel Wind plans to buy back some securities at a price 24 percent lower than par value, and would face huge pressure if investors exercise sale options on the bonds in December before their 2016 maturity, according to an Aug. 29 filing.
The fight for survival in the solar and wind industries, where overcapacity has weighed on earnings, is escalating after Xi in June said China should boost alternative-energy supply amid worsening smog. LDK Solar Co., which defaulted on a note in February and has debt exceeding capital, faces a 500 million yuan ($81 million) repayment in three months. Baoding Tianwei Group Co., whose unit’s note was suspended from trading in March due to losses, must repay 1 billion yuan in December 2015.