Hong Kong-listed Apollo Solar Energy’s subsidiary bagged a $2.5 billion contract for silicon thin-film solar manufacturing equipment from a leading Chinese power company, which is also set to become Apollo Solar’s new major shareholder.
Wholly owned subsidiary Fujian Apollo will produce and deliver the solar production equipment in three phases each valued at $850 million to Hanergy Holding Group Limited, a private power generation company based in Beijing.
Each batch will contain 140 units of plasma-enhanced chemical vapor deposition and 30 units of physical vapor deposition equipment, key machinery in solar PV modules production.
Coming next to the deal is Hanergy’s planned subscription to a total of 4.911 billion in shares in Apollo Solar at 0.239 Hong Kong dollars per share.
Hanergy will become a major shareholder following the shares subscription and will appoint three directors to Apollo Solar’s board. Apollo Solar (HKG:
0566
) is currently trading at 0.77 Hong Kong dollars at the Hong Kong Stock Exchange.
The shares subscription will happen after Hanergy pays half of the production line contract cost.
“The mega order will generate large amounts of cash flow to Apollo, thus will highly enhance its research and development resources,” said Peng Li Bin, Apollo Solar’s executive director.
The executive said the project can significantly expand Apollo’s market share in the global solar equipment and integrated turnkey solution market.
Apollo Solar said the gross proceeds of the subscription will reach 1.17 billion Hong Kong dollars, which will be used to increase the company’s production capacity.
The returns will also be invested in research and development to expand solar technology or businesses through acquisitions.
Apollo Solar Energy supplies equipment for solar modules in China. It reported gross profits of 234 million Hong Kong dollars from its solar business last year.
Hanergy, meanwhile, has focused on a combined approach to clean energy production with an installed capacity of 600 megawatts in hydropower and at least 300 MW of solar energy in Guangdong and Sichuan, among others.
