Chinese solar company LDK Solar (NASDAQOTH:LDKSY), the world's second-largest maker of the wafers used in solar cells, is selling a 19.9% stake to Heng Rui Xin Energy for an estimated $23 million.

The deal calls for a purchase price of $0.86 per share, according to a company press release. Heng Rui Xin Energy Co. is 60% owned by Hi-tech Wealth Investment and Developing Co., Ltd. and 40% owned by Xinyu State-Owned Asset Management Co., Ltd.

LDK Solar will be issuing new shares to provide Heng Rui Xin's minority stake, and will be giving Heng Rui Xin the right to choose three additional directors on LDK Solar's board. The parties have also agreed to add two independent directors to the LDK Solar board.

The transaction is dependent on Chinese government approval.

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