Hanergy Solar talks up growth plan as it waits for parent to pay overdue bills

Hanergy Solar, the Hong Kong-listed solar-panel production equipment maker whose parent owes it a significant amount of money, said yesterday it had solar farm expansion plans, but it did not reveal details.

The cash position of the privately controlled company, a unit of Hanergy Holding Group, should be more than double its first-half sales by the end of this month if its parent company pays overdue receivables.

Hanergy Solar had HK$5.8 billion of trade and other receivables at the end of June, 2.8 times its first-half sales of HK$2.08 billion. Most of its sales are to its parent company.

Of the HK$5.8 billion, overdue payments owed to the firm by its parent total HK$3.7 billion. By Wednesday, the parent had settled some HK$1.04 billion of it. The parent has pledged to pay the rest by the end of the month. That means Hanergy Solar, which had HK$1.2 billion of cash on June 30, should have HK$4.9 billion on hand in four weeks.

Chief financial officer Ronnie Hui Ka-wah said the parent "needed time to process the payments". Asked if Hanergy Solar would pay a dividend to shareholders given the expected cash inflow, Hui said the firm's expansion plan for solar farms required substantial amounts of capital.

"But we will certainly review regularly whether there is room for a dividend payout," he added.