Hanwha Chemical Corporation will purchase about 50 percent of the shares in Solarfun Power Holdings Company, the fourth largest solar module manufacturer in the world, for 434 billion Korean won ($371.9 million).
The Korean chemical company will initially buy 36.4 million shares from Solarfun at 14.51 Chinese yuan per ordinary share, or the equivalent of $10.72 per American Depositary Share. Hanwha will also purchase a combined 120.4 million ordinary shares from Good Energies II L.P. and Yonghua Solar Power Investment Holding Limited, a company owned by Yonghua Lu, chairman of Solarfun.
These acquisitions will bring Hanwha’s total stake in Solarfun to 49.99 percent. Hanwha will designate three people to Solarfun’s board, one of which will be elected board chairman. The remaining board members will remain independent.
Solarfun expects to raise $78 million from the deal which it will use mainly for expansion.
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“We share a common vision for Solarfun: to make it our flagship vehicle in the solar business and to build one of the largest and leading solar companies in the world,” said Ki-Joon Hong, chief executive and president of Hanwha.
Hanwha Chemical (KRX:A009830), an affiliate of Korean conglomerates Hanwha Group (KRX:A000880), also constructed a 30-MW solar cell production facility in Ulsan, South Korea.
Solarfun revealed in July plans to boost its solar cell production capacity by 50 megawatts, which will bring its total capacity to 550 MW by 2011. The company also intends to convert 160 MW of its current cell production lines into high-efficiency emitter technology to increase the efficiency of its monocrystalline and multicrystalline cells by 18.5 percent and 17 percent respectively.
Solarfun (Nasdaq:SOLF) will also construct new manufacturing complexes, which will add another 500 MW of cell capacity and 1.2 gigawatts of module capacity next year.
The company received stronger demand for its products than it anticipated, forcing it to sell most of its existing capacity for the year.
“Our continued ramp-up in capacity is driven by increased visibility of demand from our customers in the first half of 2011 and we want to be prepared to meet this additional demand,” said Peter Xie, president of Solarfun.
