China

Suzhou Hailu Heavy Industry Plans to Acquire 83.6% of Chinese Photovoltaic Firm for RMB 1.76 Bln

Summary:

  • Suzhou Hailu Heavy Industry (002255.SZ) has recently announced plans to acquire a 83.6% stake in Ningxia Jiangnan Jicheng Technology Co. for RMB 1.756 billion, as reported by Sina.
  • The company plans to finance the acquisition in both cash and shares.
  • In addition, the company plans to raise up to RMB 759.6 million through a private placement to support the deal.

Why It Matters:

  • Ningxia Jiangnan Jicheng Technology is mainly engaged in designing, building, and operating photovoltaic power stations. The company’s total revenue from its main photovoltaic business for 2015 was more than RMB 2 billion.
  • Suzhou Hailu Heavy Industry is primarily engaged in the design, manufacture, and distribution of heat boilers and related products. The company earlier reported that its net profit for 2016 declined 11% from the previous year to RMB 75 million. The company’s objective might be to enter the photovoltaic business in order to boost its earnings.
  • The seller of the stake in Ningxia Jiangnan Jicheng Technology has promised that the company will post a total net profit after deducting non-recurring gains and losses for 2017, 2018, and 2019 combined of more than RMB 823 million.