Hanwha Chemical To Purchase 49% Stake in Solarfun

South Korea’s Hanwha Chemical Corporation (009830.KS) has agreed to purchase a 49.99% stake in Solarfun Power Holdings Co., Ltd. (Nasdaq: SOLF), a vertically integrated Chinese solar manufacturer.

Hanwha Chemical will purchase 36,455,089 ordinary shares from the Company at a price of RMB14.51 (US$2.144) per ordinary share, which corresponds to a price of US$10.72 per American Depositary Share. The total proceeds to the Company will be approximately US$78 million.

Hanwha Chemical has also entered into separate agreements to acquire from Good Energies II LP and Yonghua Solar Power Investment Holding Ltd., a company owned by Solarfun’s Chairman, Mr. Yonghua Lu, a total of 120,407,700 Solarfun ordinary shares and 1,281,011 Solarfun American Depositary Shares (ADS), representing all of the ordinary shares and ADSs held by them.

Following the closing of the purchase of shares and ADSs from the Company, Good Energies and Yonghua and the transactions completed thereby, Hanwha Chemical will own 49.99% of Solarfun’s outstanding shares and hold a 49.99% voting interest in Solarfun.

The senior management team of Solarfun will remain with the Company upon completion of the transactions. It is expected that three designees from Hanwha Chemical will be nominated to serve on the Solarfun Board and that one of the Hanwha Chemical designees will be elected Chairman of the Board.

Ki-Joon Hong, CEO and President of Hanwha Chemical said, "We share a common vision for Solarfun: to make it our flagship vehicle in the solar business and to build one of the largest and leading solar companies in the world."

John Breckenridge, Managing Director of Good Energies, commented, "Over the past few years, we have seen some remarkable progress at Solarfun. With a new and cohesive management team, the Company has executed an OEM and vertical integration strategy, made large capacity additions, achieved substantial cost reductions, doubled shipment volumes in 2009 and issued an equally strong growth forecast for 2010, made technological advancements such as selective emitter technology which has resulted in cell efficiency improvements, and has achieved new market penetration."

Hanwha Chemical Corporation, established in 1965, is a leading chemical producer whose principal activities are the production of CA (chlor-alkali), PE (polyethylene) and PVC (polyvinyl-chloride) products. The company is publicly traded on the Korea Exchange and generated revenues of US$ 2.6 billion in 2009. HCC has identified solar energy, along with advanced batteries, nanotechnology-based materials, and biopharmaceuticals/biosimilars, as key growth platforms. HCC entered the solar industry in 2009 with the construction of a 30-megawatts (MW) cell production facility located in Ulsan, South Korea, and has plans to expand globally across the solar value chain to become a vertically-integrated player.

HCC is an affiliate of Hanwha Group, one of Korea’s 10 largest conglomerates. Hanwha Group has 46 affiliates of which six are publicly traded, including HCC and Korea Life, the second largest insurance company in Korea. In 2009, Hanwha Group had assets of approximately US$68 billion and total revenues of approximately US$30 billion.

In Other Solar News…

The government of Spain, a world leader in renewable energy, said it plans to cut subsidies for photovoltaic solar plants by up to 45 percent as it seeks to slash spending amid the economic crisis.

Read AFP coverage at the link below.

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