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.
“The development of the business of the group, in particular the construction of the solar power farms in (China), was extremely capital intensive,” SFCE added. “All of the proceeds from the 2016 possible disposal were proposed to be used for the reduction of the group’s debt.”
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.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.
1 comment
By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.
Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.
You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.
Further information on data privacy can be found in our Data Protection Policy.