United PV to raise $85.4 million with share issuance

The subscription price represents a discount of roughly 20.83% to the stock’s closing price of HK$1.20 per share on April 19, according to a statement to the Hong Kong stock exchange. The subscription agreement will be terminated if the conditions of the transaction are not met by June 15.

Driven Innovation is  an  indirect,  non-wholly owned  subsidiary  of  Beijing-based financial services provider China Huarong, one of the biggest shareholders of United Photovoltaics. The new subscription expands the group’s issued shares from 7,452,032,287 to 8,152,032,287, reducing the stake of its largest shareholder — China Merchants New Energy (CMNE) — by 2.3% to 24.52%. China Merchants Group indirectly holds a 79.36% stake in CMNE.

Earlier this year, Orix Asia Capital became United PV’s second-largest shareholder with the purchase of a 14.9% stake. With the new Huarong subscription, Orix’s interest in United PV will fall to 13.18%. The number of publicly held shares will fall from 49.76% of the group’s total issued shares to 45.48%.

United PV — which will use the proceeds for general working capital purposes and to support business development — recently noted the financial challenges facing China’s solar industry. Li Hong, the company’s chief financial officer, said last week at the SNEC trade show in Shanghai that Chinese companies “still struggle” to secure funds for project development. He identified corporate and medium-term bonds as particularly attractive fundraising tools in the current environment.

The company — which recently announced plans to change its name to Panda Green Energy Group — has aggressively raised funds via a number of varied transactions over the past year. In March, it raised HK$223.9 million to shore up its working capital and support business development by issuing 270,000,000 new shares. And last August,  it generated net proceeds of HK$364 million by issuing three-year convertible bonds, exclusively to finance the construction of solar projects.

“We’re looking to strengthen PV investment in China,” Li said at the SNEC Global PV Financial Summit last week, noting the company’s involvement in the Photovoltaic Green-Ecosystem Organization (PGO), an industry body that promotes the financing of PV projects throughout China.

The group made its first foreign investment last autumn, with the purchase of 82.4 MW of aggregated capacity in the U.K. for about $39 million. Li said that going overseas is a “good choice,” given changing domestic policies, delayed payments of government subsidies to developers, overcapacity and slow GDP growth in China. In particular, the group wants to build panda-shaped projects outside of China in cooperation with the United Nations Development Program (UNDP). Li also said the group has been hunting for investment opportunities in the Philippines, but did not elaborate on its specific plans.