Evergrande: transboundary PV bet beats

Polaris solar PV net news: it is easy to see, new photovoltaic business into shell companies, Xu jiayin, or would like to make a highly anticipated capital operation. Because of policies to promote the development of photovoltaic industry, evergrande mining opportunities.

Evergrande, these two words just like Xu jiayin in two meetings with the Hermes belt, in 2014, much industry and investors attention. Of course, concern has nothing to do with Hermes, but its constant turns, good style of a bid to open up, with a fashionable word, is cross-border.

As developers, evergrande has several years of cross-border road covering football, cooking oil, milk and drinking water. After the investment of billions of Yuan on September 29, it announced an investment of 90 billion yuan, in Zhangjiakou, Hebei province to build 9.2 million-kilowatt solar photovoltaic power projects. On October 7, the Tibetan group in Hong Kong said, evergrande has joined forces with United States companies SolarPowerInc. (hereinafter referred to as SPI) MOU, both intended to discount price of about 87%, the totals $ 1.2 billion stake in the Tibetan group. Among the evergrande real estate investment of HK $ 966 million, after the transaction is completed, hide their countries will become the largest shareholder of the group, the funds for the development of solar-energy business.

If the previous cross-border has not stepped out of the circle of the consumer, the evergrande investment photovoltaic twice in a row in less than ten days, can be said to be playing a lot of. So, entering today’s hottest photovoltaic industry, evergrande would appreciate what recent multi-billion-dollar investments and what it can bring to the boss?

Stroke volume

As with previously expected, evergrande’s repeated action or operation without capital investment sectors also have imaginations.

Hang large stakes in Tibetan group, investment community widely believes that this is a classic shell behavior. If the deal closes, evergrande real estate is hidden with SPI control group over 90% shares, according to the Hong Kong Stock Exchange’s request, triggering a general takeover regulations. Therefore acquirers need to apply to the Hong Kong stock exchange the waiver, that is, to independent shareholders adopted at the General Assembly does not implement the full takeover proposals, so as to retain the listing status. According to the announcement, evergrande has also agreed to subscribe to SPI total 21.74 million shares, about SPI 3.95% of all issued shares.

Statistics show that SPI is a United States registered in California’s vertically integrated photovoltaic solar developers, which is a complete solar power and solar energy solutions, mainly for the United States business and industry, Government, utilities and housing facilities with solar power generation systems. As early as in 2011, the company was bought by PV giants has arisen now LDK, beginning in 2014, companies in Europe, Japan and China to conduct business.

SPI has rolled out the “front”, but as we all know, PV’s business model is hard to make a difference, and this means that future there may be an increasing number of competitors entered, and the current high level of dependence on Government subsidies, larger voice means that companies in the industry are also stronger.

Therefore, the evergrande real estate acquisition, it is not surprising. Early due to the photovoltaic industry requires a huge amount of money, given the high indebtedness of the industry characteristic, evergrande photovoltaic business in assets of listed companies, and can lead to debt ratio increased further, negative impact on the real estate financing business, and acquired a “shell company”, achieve operational independence and looking for financing opportunities, it would be a better choice.

In addition, the capital markets for new energy’s valuations far higher than real estate, independent trading helps increase PV company valuations, laying a solid foundation for subsequent equity financing.

It is easy to see, new photovoltaic business into shell companies, Xu jiayin, or would like to make a highly anticipated capital operation. On one hand, because of evergrande’s PV industry has just started, there is no asset injection, so bought a new shell company and there is no financing barriers, on the capital markets for new energy’s valuations far higher than real estate, independent trading helps increase PV company valuations, laying a solid foundation for subsequent equity financing.

Gambling policy

Over the years, counting launched large-scale PV projects in the world, are invariably rely on support policies. Evergrande’s big cross-border into the photovoltaic industry, may also have been betting on domestic policy support continues to increase.

Persistent large Insider says before this round of the photovoltaic market situation and different, a few years ago, companies mostly rely on output in Europe and America to solve order issues, now more focus on domestic policy. Under positive news such as photovoltaic power generation costs continued to decline, photovoltaic power plant began to be sought after capital since last year. Recently, including Shanghai, Zhejiang, Jiangsu, Jiangxi, Shandong, Henan and Anhui Provinces, plus the PV industry policy was introduced to encourage promotion of distributed PV industry development. It can be said that huge industrial space is an important cause of evergrande’s bet.

One obvious manifestation is, evergrande real estate within the new energy sector very seriously. The end of September, evergrande has signed with the Government of Zhangjiakou City solar project was personally led by Xu jiayin, Vice President Ke Peng, Shi Shouming also went along, plus Beijing Chairman Xu Xiaojun, executive team, signed an agreement with the local Government of Zhangjiakou together.

According to the specific content of the agreement, evergrande in the local construction of solar photovoltaic projects are as follows: invest 6 million-kilowatt solar PV power plant project within three years; three years to invest in 200,000-kilowatt industrial park of distributed solar power projects; three-year investment in 3 million-kilowatt solar photovoltaic farm project, three projects total installed capacity of 9.2 million-kilowatt.

According to the information released by the National Energy Board, and by the end of 2013, 22 major provinces, autonomous regions and municipalities have been grid-connected 741 large-scale photovoltaic power generation project, mainly in Northwest China. Cumulative installed capacity in the top three provinces, Gansu province, Qinghai province, and Xinjiang Uygur Autonomous Region, respectively, and 4.32 million-kilowatt and 2.57 million-kilowatt, which means that, evergrande PV projects once completed, its total installed capacity will exceed ranked second in Gansu and Qinghai combined. In addition, evergrande real estate group new energy development centers have also been set up, responsible for Group on solar energy, wind energy, nuclear energy, ocean energy, geothermal energy, biomass energy and other renewable energy industries in the areas of research, market development and strategic investment and management work. Evergrande has become attached great importance to the new energy industry projects, it is understood that the company exclusively staffed by top executives and elite staff established a new management and operations team.

Such a big and diverse inputs, it is easy to see Xu jiayin, a new energy policy and the PV industry’s confidence in the future.

Suspect prospects

So why choose to Zhangjiakou as the project is located? Xu jiayin said that within 5 years the city he visits three times in a row, only the Zhangjiakou. “Whether it is real estate, grain or PV, constant there was strong support from the County, Zhangjiakou City. Has a very good environment in Zhangjiakou and soft, are tailored to the various conditions. Countries are trying to encourage the development of related industries, evergrande is very confident on the bilateral cooperation, and will increase investment and promote progress on the project. ”

Although confident, but as a Hong Kong-listed companies, evergrande’s choice is not recognized by international investors, even have international rating agency poured cold water on the boss.

On October 9, the Agency announced, evergrande real estate investment in the photovoltaic industry is not much better, and believes that the investment plan may impact negatively on evergrande’s credit status.

Agency pointed out that in the study, evergrande has developed a radical expansion plans of the photovoltaic industry, but his lack of relevant professional experience. In particular, the evergrande shortly after entering the agricultural and consumer sectors, and again into very different industries and will bring execution risk.

Photovoltaic industry is not completely optimistic about the constant move. Buy Tibetan group in conjunction with evergrande real estate is the SPI company, LDK LDK in 2013, serious financial problems, the former Chairman of LDK quit as the company and its subsidiary, the Executive Director. Therefore, the sources said, LDK LDK has wagered all to SPI, LDK’s plan was to SPI as a station platform, becoming an operating company, the initial idea is to find a partner to do EPC and joint development projects, was underwritten by these partners for solar power projects, assets are then loaded into SPI, which makes high performance.

Insiders claim that PV power station’s profitability is not as long as money can, PV is the core of enterprise operation mode. Even industry giants like has arisen now, profits are also losing money. Thus has arisen now will be happy to find the mode of evergrande real estate companies like to do try to, photovoltaic business provides only technical services and operations, risk is relatively small, particularly with regard to capital, evergrande promises even greater risks and pressure.

Original title: evergrande real estate straddling PV bet and beats

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