Oct. 9 (Bloomberg) -- Shunfeng Photovoltaic International Ltd., a Chinese solar-cell maker, surged to the highest price in Hong Kong since its initial public offering in July 2011 after bidding for the main unit of Suntech Power Holdings Co.
The stock jumped as much as 20 percent, the most since March 12, to a record HK$3.95 and traded at HK$3.83 as of 10:46 a.m. local time. The benchmark Hang Seng Index fell 0.7 percent.
Unit Jiangsu Shunfeng Photovoltaic Technology Co. made a bid to acquire stock in Wuxi Suntech Power Co., which makes solar cells and panels, according to a statement to the Hong Kong stock exchange. Shunfeng has paid a deposit of 500 million yuan ($82 million) to the administrator of Wuxi Suntech, which is refundable should the bid fail.
“It’s hard to make profits immediately from manufacturing solar panels, thus the purchase may be part of a long-term plan to use the products in future for the company’s own power projects,” Wang Xiaoting, a Beijing-based analyst of Bloomberg New Energy Finance, said today by phone. “The oversupply is expected to be eliminated in the second half of 2014 at the earliest.”
Shunfeng Photovoltaic has been actively buying solar energy assets this year. The company said in July it will take a 95 percent stake in Hareon Solar Technology Co.’s solar farms generating a combined 479 megawatts. Later that month, it agreed to purchase a total of 110 megawatts of projects from Jetion Solar (China) Co. and Haiwei (Xinjiang) New Energy Co.
Wuxi Suntech said it has 10.7 billion yuan of debt, the official Xinhua News Agency reported on Aug. 14, citing Yang Erguan, a representative at its insolvency and restructuring administrator group.
Shunfeng said it plans to fund the acquisition by raising debt or capital or by forming a joint venture or partnership. It may also use its own resources or a combination of all the options.
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