Hanergy accessing 8.5-11.5% finance


Doubts regarding the Hanergy Group and Hanergy Thin Film Power’s (HTF) solar operations have been raised over the last few weeks, with analysts and newspapers including The Financial Times and the Washington Post noting that the vast majority of HTF’s sales having come from sales of equipment to the Hanergy Group.

HTF has since sought to reassure investors that it will be generating additional income, from its downstream business in China. The company issued a statement earlier this month indicating that it will be able to repay the close to $2 billion it has incurred through building PV power plants in China, once those projects are completed.

However, The FT today reported that HTF has been accessing high cost financing during a time when interest rates have been falling. The loans have been accessed through what FT describes as “trust products”, which incur interest rates of between 8.5% and 10.5%, once fees are taken into account.

The FT writes: “Over the past two years Hanergy Group has raised at least Rmb 3.5 billion ($560 million) through a number of trust products, lightly regulated savings products predominantly sold to wealthy retail investors, issued by at least four different companies.” The FT notes that the loans are guaranteed personally by Hanergy Group Founder Li Hejun and that one loan worth approximately $50 million was secured by selling one of Li’s Gulfstream jets to the lender, after which it leased the aircraft back.

Li himself is estimated to now be China’s richest individual, overtaking Alibaba founder Jack Ma. His personal rise in fortunes has largely been on the back of the phenomenal rise HTF’s share price, which is outperforming larger solar companies with a proven track record and substantiated manufacturing operations. Li holds around 75% of HTF’s shares.

HTF has acquired a range of CIGS companies including Germany’s Solibro, and U.S.-based MiaSolé and Global Solar. It currently claims to be building out its manufacturing capacity with these technologies. Confirmed reports as to PV manufacturing equipment sales to supply this build out are difficult to come by, however pv magazine understands that recent sales announcements from Singulus and Spire Corporation were for sales to HTF.