Debt-saddled Chinese solar developer Panda Green is starting to cut it fine with its plans to generate enough cash to pay off reported debts of HK$1 billion (US$127 million) which will fall due for repayment by May.
The former United PV Group in January outlined a plan to generate most – an estimated HK$996 million – of that cash by a huge shares issue which would see state-owned bodies own as much as 30% of the enlarged company.
To bring that plan to fruition, Panda Green will need the permission of shareholders prepared to stomach a significant dilution of their current holdings in the developer as the new shares would add up to more than 68% of the existing stock.
Panda Green announced to the Hong Kong Stock Exchange in January that paperwork relating to the shares issue, including details of the special general meeting necessary to vote it through, would be published by today.
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However the company yesterday announced the deadline for circulating the paperwork would now be on March 13.
Under the plan, the State Owned Enterprise Structural Adjustment China Merchants Buyout Fund would subscribe to up to 1,216,793,309 of the new HK$0.3 shares, to own up to 7.57% of the enlarged company. The Shenzhen City Guoxie First Equity Investment Fund – an entity whose name also implies public ownership – has committed to take shares amounting to 0.84% of the new company and a US$123 million loan owed to state-owned Qingdao Investment would be capitalized as a 19.96% slice in the new company.
The final entity to subscribe to the proposed shares issue is the Asia Pacific Energy and Infrastructure Investment Group Ltd investment holding company ultimately owned by Panda Green shareholder He Bing, who currently has a 5.87% stake in the company. He’s investment vehicle has committed to take a 6.49% stake in the enlarged Panda Green, on top of what remains of his existing holding. The indebted developer appointed He’s daughter Xie Yi as a non-executive director on a HK$200,000 salary within days of the shares issue plan being announced.
At the end of June last year, Panda Green reported total debts amounting to RMB20.8 billion (US$3.07 billion), of which it said HK$1 billion would fall due for repayment by May.
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