Solar panel maker Comtec to raise HK$611m from share sale to Chinese businesses

Loss-making solar panel parts maker Comtec Solar Systems Group has agreed to sell shares worth HK$611 million at a substantial discount to a new energy group led by Wuxi municipal government-backed financial services firm Guolian Development Group.

The fund-raising, which will result in a change in its largest shareholder, will see Comtec diversify into downstream solar farm development amid falling product prices and tough competition in upstream panel parts manufacturing.

“The subscriptions will strengthen the financial position of the company and provide financial resources to fund and support the group’s expansion into the downstream solar power business,” the Shanghai-based firm said in a filing to Hong Kong’s stock exchange on Monday.

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Comtec will sell 672.9 million new shares to newly established Gualian Financial Holding Group so that it will own a 29 per cent stake; and 255.2 million shares to mainland businessman Li Wanbin, who will get an 11 per cent stake. The stake of the current controlling shareholder, chairman John Zhang Yi, will be diluted to 26.9 per cent from 44.9 per cent.

The selling price of 66 HK cents per share is a 20.5 per cent discount to the last traded price of 83 HK cents on Friday before trading was halted Monday morning pending the shares sale.

Guolian Financial is 40 per cent-owned by state-owned Guolian Development, which has over 90 billion yuan of assets invested in banks, securities firms, insurance, trust and fund businesses, besides green energy projects.

Guolian Financial is also 35 per cent-owned by automobile shock absorber maker China First Capital, and 25 per cent by financial services firm New Citic.