NEW YORK (AP) -- LDK Solar Co. said Tuesday that Fulai Investments Ltd. has agreed to buy a 12 percent stake in the Chinese maker of solar products for about $31.1 million.
The agreement would give Fulai, an investment firm owned by Chinese businessman Cheng Kin Ming, the right to appoint two directors to the struggling company's board.
Under the agreement, Fulai would buy 17 million newly issued shares for $1.83 each, which was equal to LDK Solar's Friday closing stock price.
LDK's U.S. shares rose 13 cents, or 7 percent, to $1.96 in afternoon trading. Shares have still lost 60 percent of their value in the past 12 months. They are worth a fraction of their peak, near $77, from September 2007.
LDK, like other solar companies, has been hurt by a drop in demand and prices for solar products. It hasn't posted an annual profit since 2010, and analysts polled by FactSet expect that revenue in 2012 will be less than half of LDK's 2011 level.
The company, which makes, solar wafers, cells and modules, plans to use the proceeds from the investment for general corporate purposes.
The companies said they hope to close the deal by the end of February.