Investors in Chinese solar manufacturer Shunfeng Photovoltaic International were given another worrying jolt on Thursday with the news details of the company's much-publicized acquisition of Wuxi Suntech have been delayed for a second time.
With Shunfeng having been forced to issue a profit warning at the end of February, and the joint provisional liquidators of seller Suntech Power Holdings having promised to examine the details of the deal in forensic detail, a further eight-day delay is sure to be an unwelcome development.
Shunfeng initially delayed the release of a circular announcing the details of its acquisition until Thursday and, on Thursday, revealed another delay, this time setting a deadline of Friday and cynics could be forgiven for wondering what time of day the news will arrive given the penchant of some Far Eastern firms for revealing bad news as stock markets close and the weekend opens in Europe.
The drawn-out acquisition would see Shunfeng acquire the main manufacturing unit of its fallen Chinese solar rival Suntech as well as controlling equity stakes in Suntech's Singapore and Japanese businesses.
Liquidators pledge to examine acquisition
With the liquidated Cayman-Islands-registered Suntech Power Holdings parent company that will remain after the Wuxi unit is sold off having started to become more visible at international trade shows of late, the Suntech's liquidators have stated they will be examining the exact terms of the acquisition of all three business units by Shunfeng and have already persuaded the authorities in Singapore the company's subsidiary in the city-state owes its parent US$264 million.
Shunfeng investors are already digesting the profit warning released by the company on February 28 which saw the board announce Shunfeng's annual losses for 2013 will be considerably larger than for 2012.
The statement, made to the Hong Kong Stock Exchange, explained the loss away as the result of the adjusted value of convertible bonds issued by Shunfeng on February 28 and August 19 last year with the board adding, without the need to take into account the plunge in value of the bonds, in line with international financial reporting standards, it would have made an operating profit in 2013.
That may come as little succour to investors now left waiting until Friday to learn exactly what the acquisition of Wuxi Suntech entails.
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