Hanergy's $660 Million Deal With Macrolink Unravelsby
Share sale to spur sales of solar equipment canceled
Hanergy says Macrolink hasn't made payments under sales deal
Hanergy Thin Film Power Group Ltd., the Chinese solar maker whose shares were suspended after plunging last year in Hong Kong, terminated a share issue linked to a deal intended to bring in revenue of $660 million from the sale of photovoltaic production lines.
The deal with Macrolink New Resources Technology Ltd. was announced in February 2015, where Hanergy would issue shares to Macrolink, which in turn would buy the manufacturing equipment and services for $660 million. The transaction required conditions to be met that Hanergy originally said would be in place by Oct. 31.
In a regulatory statement filed by Hanergy in Hong Kong on Tuesday, the company said it terminated the agreement to issue shares to 1.5 billion new shares to Macrolink for HK$3.64 each, a transaction valued at HK$5.46 billion ($700 million). That part of the deal was ended because Macrolink hadn’t paid 80 percent of the sum due under the sales contract by April 30, Hanergy said in the statement. The sales and service contract “shall remain in full force,” according to the statement.
The announcement is a blow to Chairman Li Hejun’s efforts to stabilize finances at Hanergy, which was once the world’s most valuable renewable energy company, worth more than $39 billion, until the stock fell 47 percent on May 20.
Hanergy was to ship 600 megawatts of building-integrated photovoltaic products to Macrolink as part of the deal and provide services to maintain the equipment thereafter.