As Shunfeng Photovoltaic International (SPI) enters into the second half of 2014, big changes are in the offing that promise to be as positively tumultuous as the first six months of the year.
Having acquired Wuxi Suntech for $483 million in April this year, SPI has announced the purchase of German solar company SAG Solarstrom AG for a reported $85 million. The deal comes just days after SPI released positive first-half financials and announced a name change to Shunfeng International Clean Energy to reflect its "strategy to become a leading and distinctive renewable and clean energy enterprise".
SAG Solarstrom was quick to assure its staff and investors that all jobs in the company which builds and operates solar PV plants were safe, and added that Shunfeng's strategy for growth meant that new employment opportunities were likely.
SAG Solarstrom filed for insolvency in December last year after being unable to raise a debt payment of 20 million. Aside from this one outstanding bill, the company was not over-indebted in accounting terms, but was suffering from a negative balance sheet. Once the transaction by Shunfeng is completed, it is expected that the limited company will be withdrawn from the stock exchange and liquidated during the further course of its insolvency proceedings.
Creditors could expect to receive up to 50% of SAG Solarstrom's insolvency assets, said insolvency administrator Jörg Nerlich. "However, depending on the actual result, the insolvency quota might also be considerably below or above this value," Nerlich said.
Name change following strong financials
Revenue for SPI in the first half of the year soared 608% year-on-year, the company said, to a total of $480 million. The contribution of additional revenue from Wuxi Suntech helped swell SPIs order book, with the Group achieving shipment volumes of 750.9 MW in the first six months of the year a 332.5% increase on last year's H1 performance.
Module sales reached $241 million, while gross profit topped $113 million, up from a mere $8.3 million in H1 2013.
"Looking forward to the second half of 2014, the Group believes that through a series of acquisition plans of solar power plants and strengthening its management and operation team, it is determined to strengthen its position as a forefront-ranking, high-performance solar cells and solar modules manufacturer in China," said Shunfeng chairman Zhang Yi.
Overall, the Group expects to manufacture 2.2 GW of cell and 2.4 GW of module this year, largely due to the recovery of Wuxi Suntechs operations.
The name change, which is subject to shareholder approval, hints at a broader, more international approach to SPI's solar operations. The purchase of SAG Solarstrom suggests that the company is intent on increasing its profile in Europe, where it has already enjoyed some success with a spurt of high-tech acquisitions. In the U.S., meanwhile, the Group purchased a 30% stake last month in American energy storage company Powin Energy Corp. in a $25 million deal.