Tongwei to Buy Former LDK Solar Unit for 870 Million Yuan
Tongwei Group, a Chinese polysilicon producer, agreed to purchase a former unit of LDK Solar Co. for 870 million yuan ($142 million) to expand into solar-cell and module manufacturing.
Tongwei, whose polysilicon is used to make solar cells, will buy LDK Solar Hi-Tech (Hefei) Co. from an affiliate of the Hefei government in China’s Anhui province, according to a Sept. 11 statement published by the government’s bidding center. Tongwei’s press office couldn’t be reached today after normal business hours.
The purchase, at seven times the price LDK got for the unit this year, will enable Tongwei to produce solar cells using its own polysilicon. While that gives it a cost advantage over some competitors, its biggest rival GCL-Poly Energy Holdings Ltd. (3800) already manufactures solar wafers with its own raw material.
LDK sold the unit in April to Hefei High Tech Industrial Development Social Service Corp. to reduce debt after a decline in solar-panel prices erased earnings. Xinyu, China-based LDK said Sept. 4 it was in talks with bondholders to delay $13 million of interest payments that were due Aug. 28. It’s hired Jefferies Group LLC to advise on its offshore debt obligations.
Tongwei is also China’s biggest producer of aquatic feed.
To contact Bloomberg News staff for this story: Feifei Shen in Beijing at email@example.com
To contact the editor responsible for this story: Reed Landberg at firstname.lastname@example.org