The news a subsidiary of solar manufacturer Shunfeng Photovoltaic has made a bid for an unspecified equity stake in Wuxi Suntech saw the prospective purchaser’s share price rocket in early trading.
Stock market investors appear to share the confidence of Shunfeng’s board that acquiring the main manufacturing unit of Suntech currently in administration would fit the company’s expansion plans in terms of production capacity and its growing downstream business.
In an announcement to the Hong Kong Stock Exchange yesterday, Shunfeng revealed its wholly-owned Jiangsu Shunfeng Photovoltaic Technology subsidiary has paid a RMB500 million (US$81.6 million) deposit to the administrator of Wuxi Suntech, refundable if the deal fails to materialize.
Shunfeng’s statement which failed to reveal the full financial details of the offer stated the company plans to fund the acquisition with debt financing, capital raising, a joint venture or other partnership, cash reserves or a combination of those methods.
Stock market website Seeking Alpha is reporting Shunfeng is one of two bidders for the debt-crippled Wuxi Suntech unit, alongside a consortium of the Wuxi local government and polysilicon giant GCL-Poly, but there has been no announcement of any bid by the latter to the Hong Kong exchange as yet.
The GCL rumor could be based on the fact parent company Goldpoly New Energy Holdings yesterday announced the completion of the issue of $50 million worth of convertible bonds which, once vested, will amount to 11% of the expanded shareholding.
GCL-Poly investors greeted the news with a distinct lack of enthusiasm in early trading, however, casting doubt on the Suntech speculation.