Hanergy Solar Energy acquires parent's UK asset in debt-equity swap
Hanergy Solar Energy has agreed to buy its parent firm's British solar panel distribution venture for HK$1 in a debt for equity swap, part of an effort to diversify into downstream panel sales and installation.
The solar panel manufacturer will take control of Hanergy Holding's Hanergy UK, which started distributing the solar panels in July last year, Hanergy Solar said in a statement to the Hong Kong stock exchange.
Solar panels are a … product where brand names do not add much value
As part of the deal, Hanergy Solar will assume HK$21.4 million in debt owed by Hanergy UK to Hanergy Holding.
Hanergy Solar's chief financial officer Ronnie Hui Ka-wah told reporters the British unit was expected to be profitable this year after posting a loss of HK$10.49 million in the second half of last year as it planned to boost the number of retail sales outlets from four to 17 by the second quarter.
Hanergy UK has a two-year co-operation deal with Swedish home furnishing giant Ikea for the sale of solar panels under the Hanergy brand.
Hui projected that Hanergy UK's market share might rise from 3.5 per cent to 13.5 per cent by the third quarter, by which time annualised revenues generated could reach £50 million (HK$633 million).