Sinovel faces credit rating downgrade

Sinovel Wind Group Co Ltd displays its equipment at an international expo in Beijing. Sinovel, one of China's largest wind turbine manufacturers, may face a credit rating downgrade amid a full-year net loss and shrinking net asset value. [Photo / China Daily]

Sinovel, one of China's largest wind turbine manufacturers, may face a credit rating downgrade amid a full-year net loss and shrinking net asset value, the company said in an announcement on Wednesday.

China Lianhe Credit Rating Co Ltd has already placed Sinovel on a negative credit watch, according to the statement.

The announcement came after an investigation of the company last month by the China Securities Regulatory Commission for suspected violations of securities laws and regulations.

The power generation company has been enduring rising debt levels, higher financing costs, slow client payments and declining wind turbine installations. It may suffer a net loss of 3 billion yuan ($489.7 million) in 2013, its financial report said last month.

Analysts said if the credit rating of Sinovel is downgraded, there is a great chance that trading in shares of the wind turbine maker will be suspended on the stock exchange market, causing a heavy financial debt burden.