Oerlikon Faces Chinese Delay on $268 Million Solar Unit Sale
Stock Chart for OC Oerlikon Corp AG (OERL)
OC Oerlikon AG, the Swiss engineering group that is selling a solar unit to Tokyo Electron Ltd. (8035), said it faces a delay from Chinese authorities to approve the $268 million deal.
“The case is still with the Chinese authorities,” Burkhard Boendel, an Oerlikon spokesman, said in an e-mail confirmed today.“We expect a decision within a foreseeable timeframe.” Oerlikon had expected the deal to close in the third quarter, Chief Executive Officer Michael Buscher said on an August 3 conference call.
Exiting Oerlikon Solar is key to Buscher’s plans to move the company forward from its 2010 financial restructuring, when it agreed to rescue-financing with hedge funds, into a position where it can look at acquisitions.
Boendel said Pfaeffikon-based Oerlikon is expecting an approval and he couldn’t comment on the reasons for the delay. Tatsuya Aso, a spokesman for Tokyo Electron, said he wasn’t sure why Chinese approval was taking more time than expected and there is “no specific issue.”
Oerlikon shares dropped as much as 2 percent and traded 1.75 percent lower at 9 francs as of 12:12 p.m. in Zurich. The stock has gained 83 percent this year.
“Obviously the division is loss-making and I expect a positive impact of the sale on net profit,” said Christoph Ladner, an analyst at Kepler Capital Markets in Zurich. If the deal doesn’t close this year, it will lead to a correction of analyst estimates, he said.
Buscher has pressed ahead with divestments this year by selling car-gear manufacturing capacity in Italy for an undisclosed price in June, and Oerlikon’s smallest textile unit, Melco, in July, also for an undisclosed sum.
Oerlikon announced the sale of Solar, which employs 675 people in eight locations, for 250 million Swiss francs ($268 million) in March. Oerlikon Solar makes equipment and production lines that companies such as Sharp Corp. use to make thin-film modules with silicon.
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