Panda Green generates small change in battle to pay down debt

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Debt saddled solar developer Panda Green hopes to raise another RMB12 million ($1.74 million) or so towards the reported RMB5.5 billion ($798 million) due for settlement this year, with a little help from the Chinese state.

Zhangjiagang City China Merchants Port Equity Investment Partnership Exercise (LP), a subsidiary of the state-owned China Merchants Group has agreed to pay Hong Kong-listed Panda Green RMB43.4 million for 17% of the 33% interest it holds in two PV projects.

Target company Fengxian Huize Photovoltaic Energy Ltd owns solar projects with capacities of 3.8 MW and 20 MW, according to an update made by Panda Green Energy Group Ltd to the Hong Kong exchange this afternoon.

With the state-backed buyer securing a put option which means it could require Panda Green to buy back the stake at any point between a year and four years after the transaction, the Panda Green board has estimated the move will secure it around RMB12 million towards its debt mountain, although it told the exchange the windfall would be used for “general working capital”.

Debt mountain

pv magazine reported in April, Panda Green was struggling under a RMB22.5 billion ($3.26 billion) debt pile, RMB5.5 billion of which was due to be settled this year.

As a result, the company sold off an 82.5 MW portfolio in the U.K. in March for £34 million ($42.5 million) and its shareholders voted through a 68%-plus dilution of their holding in an effort to raise funds.

The new project stake sale is dependent on Fengxian Huize shareholders agreeing to waive their right of first refusal to purchase the stake being sold to the China Merchants unit.

Elsewhere on the exchange, an update from poly manufacturer GCL-Poly’s project development business GCL New Energy Holdings yesterday indicated Chinese state-owned China Hua Neng Group Hong Kong Ltd is still performing due diligence on the developer ahead of a proposed purchase of a 51% stake in the business.