LDK Solar Co., Ltd. - Asia Europe Clean Energy (Solar) Advisory Co ...

RELATED PARTY TRANSACTIONS
We have engaged from time to time in various transactions with related parties. We believe that we have
conducted our related-party transactions on terms comparable to, or more favorable to us than, similar
transactions we would enter into with independent third parties. Upon completion of this offering, our relatedparty
transactions will be subject to the review and approval of the audit committee of our board of directors.
The charter of our audit committee as adopted by our board of directors provides that we may not enter into
any related-party transaction unless and until it has been approved by the audit committee.
Restructuring
Jiangxi LDK Solar was incorporated in China on July 5, 2005 by Suzhou Liouxin, a PRC company, and
Liouxin Industrial Limited, a Hong Kong company, each beneficially and wholly owned by Mr. Peng, our
founder, chairman and chief executive officer. Suzhou Liouxin and Liouxin Industrial Limited owned 27.6%
and 72.4%, respectively, of Jiangxi LDK Solar at the time of its incorporation.
Mr. Peng incorporated LDK New Energy on April 27, 2006 as his wholly owned company under the laws
of the British Virgin Islands. LDK New Energy incorporated LDK Solar Co., Ltd. on May 1, 2006 as its
wholly owned subsidiary under the laws of the Cayman Islands.
Upon approval of the relevant PRC government authorities, LDK Solar Co., Ltd. acquired all of the
equity interests in Jiangxi LDK Solar from Suzhou Liouxin and Liouxin Industrial Limited on July 10, 2006
for an aggregate consideration of $8,000,001.
Borrowings
Loan from Mr. Xiaofeng Peng
Under a loan agreement dated September 22, 2005, Mr. Peng granted a line of credit of up to
$24.2 million to Jiangxi LDK Solar at an interest rate as published by the People's Bank of China from time to
time. This loan is guaranteed by Suzhou Liouxin, Saiweng Technology (Suzhou) Co., Ltd., and Jiangxi
Liouxin Industry Co., Ltd., all of which are controlled by Mr. Peng. The loan is to be repaid at the demand by
Mr. Peng with 15-business day prior notice specifying the amount and date due.
During the period from October to December 2005, Jiangxi LDK Solar borrowed a cumulative amount of
$16.1 million under the line of credit and at the same time lent $5.5 million to Saiweng Technology (Suzhou)
Co., Ltd. In the first six months of 2006, Jiangxi LDK Solar borrowed an additional $8.1 million and repaid
$5.4 million under this line of credit. Among the repayment of $5.4 million, Jiangxi LDK Solar paid
$1.3 million to a third party at the instruction of Mr. Peng and signed an agreement with Mr. Peng in April
2006 to confirm and ratify that the payment of $1.3 million constituted a repayment of the same amount it
owed Mr. Peng. In March 2006, Jiangxi LDK Solar signed an agreement with Mr. Peng to use the
$5.5 million it lent to Saiweng Technology (Suzhou) Co., Ltd. to offset $5.5 million of the amount it owed
Mr. Peng under the credit line. In December 2006, Jiangxi LDK Solar repaid the outstanding balance of
$13.4 million to Mr. Peng, together with an accrued interest of $0.9 million.
Loan from Jiangxi Liouxin Industry Co., Ltd.
Jiangxi LDK Solar borrowed $2.6 million from Jiangxi Liouxin Industry Co., Ltd., a company controlled
by Mr. Peng, on August 12, 2006 for working capital purposes. There was no written agreement, and the loan
was interest free. This loan was repaid in full in September 2006.
Loan from Suzhou Liouxin
Under a loan agreement dated July 24, 2006, Jiangxi LDK Solar borrowed $8.1 million from Suzhou
Liouxin free of interest. This loan was repaid in full in December 2006.
Entrusted Loan from Jiangxi Liouxin Industry Co., Ltd.
Through Bank of China, Xinyu Branch, Jiangxi LDK Solar borrowed $15.0 million from Jiangxi Liouxin
Industry Co., Ltd. in December 2006 through an entrusted loan agreement. The loan carries an interest of
5.022% per year and is due in June 2007. Under PRC law, a non-financial institution may not make any
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