Panda Green accepts $22.5m hit on sale of 540 MW of solar projects
Sep 8, 2019 12:51 PM ET
- The heavily indebted developer has cashed in two eight-project portfolios for an immediate $28 million windfall but accepted the sales recognize heavy losses as it continues to try and pay down debt.
Debt saddled Chinese solar developer Panda Green has continued its fire sale of project assets by accepting a RMB160 million (US$22.5 million) hit on the transfer of 540 MW of generation capacity in its homeland.
In an announcement made to the Hong Kong stock exchange after hours last night, Panda Green said it was shouldering a RMB100 million loss on the sale of its eight-project, 270 MW Zhaolian Lvyi portfolio to Shanxi Silu Electricity Engineering Co Ltd. And the embattled developer said it was also preparing to sanction a RMB60 million reverse on the sale of its almost identical Zhaolian Lvzhao assets to Changzhou Zhaolian Lvchang New Energy Ltd.
The latter transaction will generate just RMB1 million for the developer, from a project company subsidiary with estimated net assets of RMB257 million but which saw net profits fall from RMB141 million at the end of 2017 to just RMB3 million at the end of December.
The Zhaolian Lvzhao sale will earn the seller a RMB197.5 million windfall but will incur a RMB100 million loss on the books despite the settlement of a RMB267 million shareholder loan provided by Panda Green to the subsidiary. The eight Zhaolian Lvzhao projects have registered assets worth RMB277 million and saw annual net profits retreat from RMB69 million for 2017 to RMB8 million last year.
The Hong Kong-listed parent company is scrabbling to pay down a huge debt pile and the sales will enable it to remove any borrowings associated with the projects from its huge list of liabilities.
Stating the proceeds from the project sales would be used to pay down debt, yesterday’s update added the transactions “will improve liquidity and deleveraging of the group”.