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

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LDK SOLAR CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Ì (Continued) FOR THE PERIOD FROM JULY 5, 2005 TO DECEMBER 31, 2005 AND THE YEAR ENDED DECEMBER 31, 2006 (Amounts in US$ thousands, except share and per share data) From July 5, Year 2005 to ended December 31, December 31, Note 2005 2006 Cash flows from financing activities: Capital contributions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11,534 2,022 Proceeds from new loans and borrowings ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 114,116 Repayment of loans and borrowingsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (27,106) Loans and advances from related parties ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 16,543 18,773 Repayment of loans and advances from related parties ÏÏÏÏÏÏÏÏÏÏÏ Ì (29,838) Proceeds from issuance of ordinary shares ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 10 Distributions to shareholders in connection with the Reorganization Ì (8,000) Payments of expenses relating to the proposed offer ÏÏÏÏÏÏÏÏÏÏÏÏÏ Proceeds from issuance of exchangeable notes, net of issue cost Ì (405) US$52 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Proceeds from Series A-2 redeemable convertible preferred shares, Ì 7,948 net of issue cost US$51 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Proceeds from Series B redeemable convertible preferred shares, Ì 6,949 net of issue cost US$78 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 47,922 Proceeds from Series C redeemable convertible preferred sharesÏÏÏ Ì 22,500 Net cash provided by financing activities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Effect of foreign currency exchange rate changes on cash and cash 28,077 154,891 equivalentsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 39 2,280 Net increase in cash and cash equivalentsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,687 20,540 Cash and cash equivalents at beginning of period ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 9,687 Cash and cash equivalents at end of period ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Supplemental disclosures of cash flow information: 9,687 30,227 Interest payments, net of amount capitalized ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Supplemental disclosures of non-cash investing and financing transaction: Ì 2,680 Property, plant and equipment contributed as paid-in capital ÏÏÏÏÏÏ (1) Ì 15,444 Payable for purchase of property, plant and equipment ÏÏÏÏÏÏÏÏÏÏÏ Ì 10,893 Payable for purchase of land use rights ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Conversion from exchangeable notes to Series A-1 redeemable Ì 1,268 convertible preferred sharesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (14)(16) Ì 7,948 Offset of amounts due to/from a related party ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (22) Ì 5,478 See accompanying notes to consolidated financial statements. F-8
LDK SOLAR CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM JULY 5, 2005 TO DECEMBER 31, 2005 AND THE YEAR ENDED DECEMBER 31, 2006 (Amounts in US$ thousands, except share and per share data) (1) PRINCIPAL ACTIVITIES, ORGANIZATION AND BASIS OF PRESENTATION Principal activities The accompanying consolidated financial statements consist of the financial statements of LDK Solar Co., Ltd. (the ""Company'' or ""LDK''), and its subsidiaries Jiangxi LDK Solar Hi-Tech Co., Ltd. (""JXLDK'') and LDK International Solar Co., Ltd. (""LDK International''). The Company and its subsidiaries are collectively referred to as the ""Group''. The Group's principal activities are manufacture, processing and sale of multicrystalline silicon wafers. Organization JXLDK was incorporated on July 5, 2005, in Xinyu, Jiangxi Province, the People's Republic of China (""PRC'') by Suzhou Liouxin Industry Co., Ltd. (""SZ Liouxin'') and Liouxin Industrial Limited (""HK Liouxin'') which are both controlled by Mr. Peng. SZ Liouxin is fully owned by HK Liouxin. The registered shareholders of HK Liouxin are Mr. Xiaofeng Peng (""Mr. Peng'') and his father, who acts as a nominee and holds the shares in trust for Mr. Peng. JXLDK was in a development stage from July 2005 to April 2006 and started product sales at the end of April 2006. The development stage activities mainly included constructing new manufacturing plants, design, formulation and testing of new products. The registered capital of JXLDK as at the date of its inception and prior to the Reorganization described below was US$29,000. From the inception date to December 31, 2005, SZ Liouxin and HK Liouxin contributed paid-in capital of US$7,479 and US$4,055 respectively to JXLDK in cash. In 2006 prior to the Reorganization, SZ Liouxin contributed to JXLDK paid-in capital of US$521, and HK Liouxin contributed US$1,501 in cash and US$15,444 in the form of property, plant and equipment. The value of these property, plant and equipment, which were newly acquired by HK Liouxin for the purpose of injecting into JXLDK as paid-in capital, are based on the actual purchase costs incurred by HK Liouxin to acquire these property, plant and equipment from the vendors. On May 1, 2006, Mr. Peng, through his wholly owned subsidiary, LDK New Energy Holding Limited incorporated the Company in the Cayman Islands under the laws of the Cayman Islands as part of the reorganization of JXLDK (the ""Reorganization''). In connection with the Reorganization and the preparation for the intended Initial Public Offering, the Company entered into the following series of transactions: 1) The issuance of 75,000,000 ordinary shares of the Company at par value of US$0.10 per share (adjusted for the ten-for-one share split effected on July 18, 2006) to LDK New Energy Holding Limited during 2006 in connection with the Reorganization; 2) The Company's acquisition of all interests in JXLDK from SZ Liouxin and HK Liouxin for the consideration of US$8,000 on July 10, 2006, when government approval was obtained, as part of the Reorganization; 3) The issuance of exchangeable notes to two unrelated investors for cash consideration of US$8,000 which is mandatorily convertible into 3,000,000 Series A redeemable convertible preferred shares as mentioned below (refer to note 14); 4) The issuance of 4,580,000 Series A redeemable convertible preferred shares to a group of unrelated investors including 3,000,000 Series A-1 redeemable convertible preferred shares converted from the exchangeable notes above and 1,580,000 Series A-2 redeemable convertible preferred shares issued for cash consideration of US$7,000 (refer to note 16); F-9
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PROSPECTUS 17,384,000 American Depo
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We were incorporated in the Cayman
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percentage of light energy from the
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Listing ÏÏÏÏÏÏÏÏÏÏÏÏÏ
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(1) Gross profit for the year ended
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RISK FACTORS Investment in our ADSs
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Reduction or elimination of governm
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capacity or to increase our manufac
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delivery or failure to meet deliver
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specifications or product defects.
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Compliance with environmental regul
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operations or the price of our ADSs
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tax rates and other measures. Forei
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company in connection with any incr
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of approximately $22.05 in the net
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outside the United States. As a res
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The forward-looking statements cont
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CAPITALIZATION The following table
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DILUTION If you invest in our ADSs,
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DIVIDEND POLICY We have never decla
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SELECTED CONSOLIDATED FINANCIAL AND
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MANAGEMENT'S DISCUSSION AND ANALYSI
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polysilicon prices will decline in
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listed public company in the United
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increase. See ""Risk Factors Ì Ris
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subjective. The assumptions used in
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2006 and February 6, 2007. During t
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value of the our business. Under th
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Year Ended December 31, 2006 (in th
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""Exchange Rate Information'' in th
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ended September 30, 2006, net incom
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For additional information relating
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The non-cancelable purchase obligat
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previously deemed material, but are
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module production will increase fro
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The following diagram illustrates t
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Because we are a pure-play solar wa
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Wafering. After passing inspection,
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our revenue and customer base to ta
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‚ Our agreement with E'mei Semi-c
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photovoltaic cell or modules, and w
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A breakdown of our employees by are
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tax treatments to foreign-invested
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On September 21, 2006, the CSRC pub
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Gang Wang is a non-executive direct
Page 94 and 95: directors on our audit committee wi
Page 96 and 97: monies of or belonging to us may be
Page 98 and 99: (10) Vests on July 31, 2007. Brilli
Page 100 and 101: Securities (USA) LLC, which is a re
Page 102 and 103: interest-bearing loans directly to
Page 104 and 105: person, by its duly authorized repr
Page 106 and 107: History of Securities Issuances The
Page 108 and 109: persuasive authority in the Cayman
Page 110 and 111: making any sale by public or privat
Page 112 and 113: Reports and Other Communications Wi
Page 114 and 115: Amendment and Termination How may t
Page 116 and 117: ‚ deliver distributions on any AD
Page 118 and 119: SHARES ELIGIBLE FOR FUTURE SALE Upo
Page 120 and 121: TAXATION The following summary of m
Page 122 and 123: individual, up to $3,000 of capital
Page 124 and 125: person and on sales of ordinary sha
Page 126 and 127: The estimated offering expenses pay
Page 128 and 129: Pricing of the Offering Prior to th
Page 130 and 131: ADS with a view to selling it to th
Page 132 and 133: EXPENSES RELATING TO THIS OFFERING
Page 134 and 135: ‚ no new admissible evidence rele
Page 136 and 137: WHERE YOU CAN FIND ADDITIONAL INFOR
Page 138 and 139: REPORT OF INDEPENDENT REGISTERED PU
Page 140 and 141: LDK SOLAR CO., LTD. AND SUBSIDIARIE
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