Bailed-out Chinese project developer Singyes Solar is reaping the benefits of its recent takeover by a unit of Shuifa Group – after a fashion.
A separate part of the Beijing-owned construction conglomerate is set to take control of the troubled company which has been attempting to buy 100 MW of solar generation assets in China from Singyes for more than three years.
Singyes has to date received only the deposit in relation to a loss-making deal it signed in September 2016 to offload 50 MW projects in Xinjiang and Wuwei to British Virgin Islands-based investment holding company Excel Deal Investment Ltd.
That was probably down to the fact the holding company which owns Excel is in provisional liquidation subject to a proposed restructuring. However, Shuifa business Lukong Water is now set to take a controlling stake in the Bermuda-based PV investment business in question, enabling it to pay Singyes the outstanding HK$480 million (US$61.8 million) owed, subject to a Singyes shareholder vote on the amendments required to the original deal.
The original transaction was solely guaranteed by third-party investment holding company Happy Fountain Ltd, which paid the deposit on the deal.
Drop in value
The HK$1.06 billion (US$136 million) valuation applied to the solar projects in September 2016 has fallen to no more than RMB673 million (US$97.5 million) according to the latest estimate and Singyes anticipates a loss of RMB54.2 million from the proposed HK$835 million sale, which had originally been planned as a HK$861 million transaction.
Details of when the vote will be held on the proposed sale amendments have been promised by Singyes on or before February 11.
Singyes was bailed out late last year by Shuifa business Water Development (HK) Holding Co Ltd in a HK$1.55 billion takeover which saw the state-owned entity acquire a 66.92% stake in the Hong Kong-listed developer and building-integrated PV materials manufacturer.
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