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Proposal to take Hanwha Q Cells back into private ownership


Proposal to take Hanwha Q Cells back into private ownership

With Hanwha Solar Holdings already owning 94% of the company, the module manufacturer could soon be a private company again. According to SEC figures, the transaction could cost the holding company around $92 million.

The board of Nasdaq-listed PV module manufacturer Hanwha Q Cells is mulling a proposal by parent company Hanwha Solar Holdings to take the company back into private hands.

The Korea-based Hanwha Solar Holdings, a subsidiary of Hanwha Chemical Corp, has made an offer of $9 per American depositary share – each of which is a bundle of five ordinary shares – for the stock it does not already control. That represents a premium on the $6.60/ADS share price at yesterday’s close.

Hanwha Solar Holdings also offered $0.18 per outstanding ordinary share.

Hanwha Q Cells did not confirm the ownership of its stock but according to a filing made to the U.S. Securities and Exchange Commission this year, Hanwha Solar Holdings already owned 94% of Q Cells’ 4,162,038,802 ordinary shares on March 31. That would equate to a bill of almost $45.3 million to acquire the outstanding ordinary share portfolio.

The same filing stated 5,221,959 ADS shares were owned by 38 stockholders – 35 of them American – on April 19. Hanwha Solar Holdings would have to stump up a further $47 million to buy all of those stocks, adding up to a $92.3 million bill to take the company back into private control.

Volatile share price

The module maker’s shares have followed an erratic path not uncommon in the industry this year, hitting a 2018 peak of $8.67 on February 26, sliding to $7.03 on June 1 – the day after the Chinese government prompted global turmoil by announcing its intent to rein in solar subsidy spending – and hitting a low of $5.43 on July 5.

With the share price recovering since then, the private ownership proposal may indicate confidence the module maker is on the rebound, although removing the company’s public listing would also mean less scrutiny of the company’s financial health at a time when solar manufacturers are bracing themselves for the double whammy of a shrinking market and Chinese oversupply forcing down product prices.

A spokesman for Hanwha Q Cells told pv magazine: “In order to continue manufacturing and supplying top quality solar products to global markets, the management team at Hanwha Chemical Co., Ltd. has decided to undergo an organizational change that will allow Hanwha Q Cells to more efficiently respond to market dynamics.

“The proposed transaction from Hanwha Solar Holdings to acquire all outstanding shares of Hanwha Q Cells will enable the company to deliver sharper focus on our R&D and technological leadership objectives. We foresee that the ‘going private’ proposal can support these goals and augment Hanwha Q Cells’ ability to continue driving quality standards.”

Source PV Magazine

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