Group subsidiary Shunfeng Photovoltaic Holdings will sell Jiangsu Shunfeng Photovoltaic Technology — the parent of PV module supplier Wuxi Suntech Power — to Asia Pacific Resources Development Investment, which is owned by Hong Kong tycoon Kin Ming Cheng.
However, some production assets that Shunfeng Photovoltaic Holding plans to sell are currently held under another wholly owned SFCE unit, Jiangsu Shunfeng Electricity (JSE). JSE will therefore shift these assets — which include land, projects and other facilities — to a new company it will create called Liyang Shuneng Photovoltaic Power. Within the next 12 months, it will also initiate an equity transfer agreement to move the entire equity interest in Liyang Shuneng to Wuxi Suntech.
SFCE first announced plans to sell its manufacturing operations to Asia Pacific Resources Development Investment last September. At the time, it priced those assets at $683 million.
In a statement to the Hong Kong stock exchange, SFCE said it was in a negative net cash position of RMB 12,962.4 million by the end of last June. It pointed to thin profit margins, as well as the impact of anti-dumping tariffs and other U.S. trade restrictions on its manufacturing business.
In addition, it described being trapped in a “vicious cycle of increasing financial costs” that offset the growth of its power generation business in China. It manages at least 1.5 GW of solar capacity at multiple sites throughout China, with around 15 MW set to come online this year.
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Following the completion of the deal with Asia Pacific Resources Development Investment, SFCE will continue to focus on its PV generation and LED businesses. Last week, it said expects its annual losses to have widened to about $255 million last year, up from $125 million in the preceding 12-month period. It resumed trading of its shares on the Hong Kong stock exchange from Monday, following a brief halt.
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