Published on November 11th, 2013 | by James Ayre4
Jiangsu Shunfeng’s Acquisition Of Suntech To Top $540 Million
November 11th, 2013 by James Ayre
Prominent Chinese solar manufacturer Jiangsu Shunfeng has announced the details behind its planned acquisition of Wuxi Suntech. The move for consolidation of the two noted corporations will, if successful, do a great deal to improve the position of real estate magnate Cheng Kin Ming with regards to the solar energy manufacturing market.
Among those details is the estimated price of acquisition, and it’s huge — likely surpassing US $540 million dollars. The announcement, which was recently made at the Hong Kong Stock Exchange, specified that the acquisition itself would cost them about RMB 3 billion (US $493 million), with a further US $25 million headed to the Wuxi Guolian investment vehicle owned by the Wuxi local authorities. That fee will be due within three months of the completion of the deal.
That fee is part of the acquisition because of a recent deal between Wuxi Guolian and Wuxi Suntech. A deal that saw Wuxi Guolian pledge $150 million in investment into Suntech’s US-registered parent company — a company that Shunfeng doesn’t acquire as part of the Wuxi Suntech deal.
PV Magazine provides more information on the potential deal:
In return for the cash, the deal – which has to be approved by Shunfeng shareholders, the local authorities and the extensive list of Wuxi Suntech creditors – would present Shunfeng with two Wuxi manufacturing facilities which could bring 3.6 GW of annual cell and module production capacity as Shunfeng continues its expansion into the downstream business in China.
Wuxi Suntech, which went bankrupt on March 20, had three production lines in the coastal city but one of its two cell production facilities is disused and loaded with obsolete equipment. A second – 1.6 GW – cell production line has been idle since August 2012 with Shunfeng stating it could be restored to a 1.2 GW annual production rate. Of the two production lines in Wuxi Suntech’s module manufacturing facility, a 1.4 GW line is operating normally with a smaller – 1 GW – line idle since November 2012.
Something to note — the aforementioned real estate magnate, Cheng Kin Ming, currently owns a 30% stake in Jiangsu Shunfeng’s Shunfeng Photovoltaic parent company, as well as a 25% stake in solar wafer manufacturer LDK Solar.
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