Hanergy Thin Film Power Group Ltd., the Chinese solar company whose shares plunged 47 percent before trading was suspended last month, said it halted talks to sell $585 million of equipment and services to its parent company.
In a brief statement to the Hong Kong stock exchange, Hanergy said the decision will have “no material adverse impact” on its business. Trading of the company’s shares has been halted pending an announcement since May 20.
The statement adds to the puzzle surrounding why Hanergy’s stock fell and when it will resume trading. Chairman Li Hejun, who was absent from the annual shareholders’ meeting the day the stock dropped, signed the statement released on Monday. Hong Kong regulators have said they’re probing manipulation of the stock, which at one point was worth more than $39 billion.
“It is quite odd the reason for the termination was not being mentioned by Hanergy in its announcement,” Domingo Chen, chief operating officer of Quantum China Asset Management, said by e-mail. “As Hanergy’s share trading has been suspended, a lot of negatives impacted the company’s business and operations.”
Hanergy Thin Film makes factory equipment for manufacturing solar panels and sells most of the gear to its parent company, Holding Group Ltd., which is controlled by Li.
Through a unit called Fujian Apollo, Hanergy Thin Film had been seeking to sell six sets of silicon-based thin-film solar panel production lines to Hanergy Holding. The deal for 900 megawatts of capacity would have been worth about $175.5 million, according to a regulatory filing on May 4. A further deal for providing technical services was worth $409.5 million.
Hanergy Thin Film had revenue of HK$9.6 billion ($1.2 billion) last year, triple the HK$3.28 billion reported in 2013.