Bloomberg News

Hanergy to Buy Q-Cells Unit to Expand in German Solar Market

June 05, 2012

Hanergy Holding Group, a Chinese renewable-energy operator, agreed to buy the Solibro thin-film unit of Germany’s Q-Cells SE (QCE) to expand in the world’s biggest solar market by installed capacity.

The deal will help Hanergy reach 3 gigawatts in annual solar-panel volume by the end of the year, the Beijing-based company said today in a statement in the city, without disclosing current capacity or the terms of the transaction.

Chinese renewable-energy developers including solar-wafer maker LDK Solar Co. (LDK:US) are snapping up rivals in Germany, where subsidy cuts, declining demand and rising overseas supply have squeezed profit margins. Germany’s Solar Millennium AG, Solon SE (SOO1) and Q-Cells have all filed for insolvency since December.

Hanergy is boosting investments in a technology dominated by First Solar Inc., the biggest maker of thin-film panels, and plans thin-film photovoltaic cell plants in Guangdong, Sichuan and Heilongjiang provinces. In 2010 it purchased a 51.6 percent stake in Apollo Solar Energy Technology Holdings Ltd. (566), a Hong Kong-listed maker of silicon-based solar modules and cells.

“Hanergy seems to be interested in Solibro’s thin-film technology,” Heinz Steffen, an analyst at Fairesearch GmbH in Kronberg, Germany, said by phone. “It’s important for Q-Cells to get a good price for Solibro to reduce some of its debt.”

Q-Cells Insolvency

Q-Cells shares closed unchanged at 13.5 euro cents in Frankfurt after earlier jumping as much as 8.2 percent. The company filed for insolvency on April 3 following the failure of a plan to restructure its debt that included about 200 million euros ($249 million) in bonds.

A thin-film solar cell is made by placing thin layers of photovoltaic material on a semiconductor wafer. Solibro’s products are made with copper, indium, gallium and selenium instead of the silicon that’s used in conventional solar cells.

“We want to adopt advanced technology,” Jason Chow, chief executive officer of Hanergy Global Investment & Sales, said today in an interview. “Thin-film technology has more potential and room for price reduction.”

LDK, the second-biggest solar-wafer maker, completed its purchase of a 71 percent stake in Germany’s Sunways AG (SWW) in April.

“The industry is obviously in consolidation,” Chow said. “With more and more companies filing for bankruptcies, mergers and acquisitions are necessary and will become the norm.”

Government Support

Last November, China Development Bank Corp. agreed to give a 30 billion-yuan ($4.7 billion) credit line to Hanergy to work on solar and hydropower projects and expand abroad. Hanergy says it’s China’s largest privately owned renewable-energy provider.

The company will finance the Solibro acquisition using its own overseas funds, and plans to retain the unit’s workforce and operations. After the deal is completed, Solibro will raise production to 100 megawatts at its Thalheim plant in Germany, Alberta Rohardt, a spokeswoman for Q-Cells, said today by phone.

“Hanergy will provide the extensive network, the strong production capacity and the long-term R&D investment,” Chow said in the statement. “We’re confident the acquisition will enhance Solibro’s performance and capacity despite the industry’s current downturn.”

Increased Chinese output has led to a global glut of solar equipment supply, driving down solar-panel prices by 49 percent in the past year.

The oversupply “has little impact on us, as we use our own cells to build power plants,” Chow said.

Solibro GmbH was founded in 2006, began output in 2008 and added a second production line in mid-2010, according to Q- Cells’ website. The unit employs 400 people in Thalheim and 30 at a research and development facility in Uppsala, Sweden, Rohardt said.

To contact Bloomberg News staff for this story: Stefan Nicola in Berlin at snicola2@bloomberg.net; Feifei Shen in Beijing at fshen11@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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