Jiangxi, one of the poorest provinces in China, has organized an emergency loan for local PV products manufacturer LDK Solar Co. Ltd. (NYSE:LDK) to reduce the prospect of bankruptcy and safeguard local jobs.

On May 2, the provincial government came to an agreement with LDK Solar. According to a report in the official Shanghai Securities News, the local government pressurized state-owned banks into approving a loan package worth 2 billion yuan for LDK Solar.

“The money will be used for paying wages in the coming months and meeting other liquidity shortage items,” an unnamed executive from the company was quoted as saying by the paper.

LDK Solar has several production facilities in the province including the Ma Hong Polysilicon Plant, one of the largest polysilicon plant sites in the world.

Beside the ugly cash flow situation, LDK Solar’s income statement is also stunningly weak.

According to the annual financial report issued last week, the firm incurred a fourth-quarter fiscal loss of $588.7 million compared to a profit of $145.2 million in same the period a year earlier. Revenues were down 54 percent to $420.2 million and its gross margin turned from a positive 27.3 percent a year earlier to a negative 65.5 percent.

However, taking a look at its balance sheet, analysts from mutual funds can easily calculate that all ratios, including debt-to-cash and current assets-to-current liabilities, are so high that the company is mathematically on the brink of bankruptcy.

And the company’s outlook for the coming quarters is not encouraging even after it has cut 5,554 jobs this year, equivalent to more than 22 percent of the total workforce, an analyst, who asked to remain anonymous, told morningwhistle.com.

The interest on the 2 billion yuan emergency cash loan is not known.

Given the recent trade case filing against China’s solar makers, a group of U.S. manufactures could use this news to bolster their argument about unfair government support to get a favorable ruling from the trade representative.