CNPV Solar Shareholders Vote on Selling Company to Local City

CNPV Solar Power SA, a Chinese maker of solar-power equipment, scheduled a shareholders meeting today to vote on selling a majority stake to a local city for $10 million as it suffers from a “severe liquidity problem.”

The plan to sell 50.38 percent of CNPV Dongying, its sole asset, to an unidentified company controlled by the local government of Dongying, was endorsed by the board, CNPV Solar said in a Nov. 1 statement. The company, based in Shandong in northeastern China, didn’t disclose terms for the debt.

The manufacturer of photovoltaic products from ingots to panels has “a substantial need for financing current matured bank loan of its subsidiary of CNPV Dongying and other commitments,” CNPV Solar said in the statement. The company blamed “the extreme difficulty caused by the current PV industry” situation.

LDK Solar Co., the second-biggest maker of wafers for solar cells, agreed Oct. 22 to sell 19.9 percent of itself to a renewable-energy investor partially-owned by the Xinyu government. LDK is issuing new shares, which Heng Rui Xin Energy Co. will buy for 86 U.S. cents each. LDK’s American depositary receipts traded at more than $50 a share in 2008.

This “is another example of local government stepping in to support PV companies,” Wang Xiaoting, a Beijing-based analyst of Bloomberg New Energy Finance said by e-mail. These events suggest that, despite a general intention to consolidate, Chinese local governments will selectively back PV companies through supportive ownership, she said.

CNPV Solar’s shares were suspended from trading in Paris in February, when they last traded at 5.49 euros, valuing the company’s equity at about 43 million euros ($57 million) at the time, according to data compiled by Bloomberg. The company is organized under the laws of Luxembourg.

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