Comtec Solar has been scaling back some of its activities for over a year now, with the most recent asset sale a means for it to cease its poorly performing Comtec Malaysia subsidiary. Chinese company Longi has swooped in to acquire Comtec Malaysia’s assets for a reduced fee, with the assumption that it will take over the debt that had arisen within the subsidiary.
The asset transfer agreement is for target property, totaling RMB 145,700,00, and target equipment, totaling RMB 54,300,000, which includes all the machinery, equipment, furniture, computer hardware, and vehicles, at the property. The agreement was concluded on 30 December 2016, with further details of the agreement due to be circulated amongst shareholders no later than 24 January 2017.
Interestingly, the assets that are included within the agreement were valued at approximately RMB 500 million in November 2016, which means that Comtec will suffer a loss of approximately RMB 300 million as a result of the transfer. “For illustrative purposes, there is an estimated loss of approximately RMB300 million arising out of the Proposed Disposal based on the consideration of RMB200 million and the total net book value of the Target Assets as at 30 November 2016 of approximately RMB500 million,” read the corporate filing.
But Comtec Malaysia had been running at a significant loss over the last three years, which suggests that Longi will presumably be taking over the debt that the company had incurred over that time.
This move is a further expansion for Longi into Malaysia, as in August last year the company revealed plans for a large Malaysian manufacturing facility for producing silicon ingots, wafers, cells and modules. The facility will be located in Kuching City in the state of Sarawak, and is due to be of gigawatt-scale.