Hanergy TF auditors express 'significant doubt' as to company's solvency

Share

In the Hanergy TF 2015 report, Ernst & Young auditors write: "We draw attention to note 2.1 to the consolidated financial statements which indicates that the Group incurred a net loss of HK$12,233,542,000 ($US1.6 billion) during the year ended 31 December 2015. This condition, along with other matters as set forth in note 2.1 to the consolidated financial statements, indicates the existence of a material uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern."

In a worrying sign for Hanergy TF, Ernst & Young reported that it was unable to confirm over HK$5.5 billion in declared expected revenues or prepayments.

"We were unable to obtain sufficient appropriate audit evidence about the recoverability of the Group’s trade receivables and gross amount due from contract customers for contract works of Hanergy Affiliates and the aforesaid third party customer of HK$4,926,759,000 ($635 million), the other receivables due from Hanergy Affiliates of HK$6,441,000 ($830,000) and prepayments made to Hanergy Affiliates of HK$663,943,000 ($85 million)."

Besides Ernst & Young's reservations, Hanergy TF's 2015 annual report makes for interesting reading. In it, the Hanergy TF board and chairman, Li Hejun, chart a year of PV production equipment sales and share deals with Hanergy Holdings and affiliates as well as with some third parties, that were either subsequently cancelled or for which no payment, to date, has been received.

“2015 is a year full of twists and turns to the Group," the Hanergy TF annual report states.

The production equipment sales, cancellations and unforthcoming payments have been well documented and were restated in the 2015 annual report. Hanergy TF additionally provided some limited detail as to its future business — amongst a great deal of vague, forward-looking statements regarding its admittedly "Avant Garde" outlook for future PV business opportunities.

These more concrete deals included a 150 MW production equipment supply deal, for a contract amount of $125.5 million, to an undisclosed "independent customer." It also pointed to the expansion of its downstream PV power plant business and having received some 7,100 orders for residential rooftop systems, additional to the "numerous" orders for C&I rooftop arrays it has received.

Hanergy also claims to have connected over 170 MW of PV power plant projects in China to date.

Given the announced expected revenues and amounts outstanding, the Hanergy TF board reported that it will be "able to meet with its liabilities as and when they fall due in the foreseeable future." The Hanergy TF board also stated that it expects Hanergy Holdings and its affiliates to begin paying the HK$2.0 billion ($260 million) and HK$2.6 billion ($340 million) owed to it "as soon as possible." Hanergy TF said that it would take "further action" against Hanergy Holdings and its affiliates if this did not occur.

"2015 was a year of major challenge as well as a year of great reward," wrote Chairman Li. "2016 will be a year of continued transformation and re-birth for Hanergy, and will also be a year of opening up and breakthrough."

Trading in Hanergy TF shares on the Hong Kong Stock Exchange remains suspended.

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.

Popular content

Daikin launches air-to-water inverter heat pumps for residential applications

26 November 2024 The Japanese manufacturer said its new heat pumps have a temperature coefficient of up to 3.4 and a size ranging from 16 kW to 70 kW. The new solution...

Share

Leave a Reply

Please be mindful of our community standards.

Your email address will not be published. Required fields are marked *

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.