The order was cancelled due to Shangdong Macrolink’s failure to pay 80% of the manufacturing equipment order segment of the deal, which was valued at around US$198 million, while technical services fees related to the equipment order would amount to around US$462 million.

The order was cancelled due to Shangdong Macrolink’s failure to pay 80% of the manufacturing equipment order segment of the deal, which was valued at around US$198 million, while technical services fees related to the equipment order would amount to around US$462 million.

Hanergy Thin Film Power Group’s thin-film equipment manufacturing subsidiary, Fujian Apollo has technically cancelled a 2015 major order worth US$660 million to supply 600MW of a-Si thin-film tools and plant operations to Shangdong Macrolink New Resources Technology Ltd.

The order was cancelled due to Shangdong Macrolink’s failure to pay 80% of the manufacturing equipment order segment of the deal, which was valued at around US$198 million, while technical services fees related to the equipment order would amount to around US$462 million.

The deadline for payment had previously been extended to April 30, 2016. However, the unprecedented structure of the deal, whereby Hanergy Thin Film would issue 1.5 billion shares at a value of HK$0.0025 each share when its stock price (before trading halted) was significantly higher at HK$3.91 per share, meant consummation was highly unlikely unless Hanergy Thin Film’s stock started trading again. 

In reporting its 2015 annual results, Hanergy Thin Film claimed that its recognised revenue included US$248.8 million in relation to the sale of a-Si thin-film production plant for BIPV applications to Shandong. Hanergy Thin Film claimed to have provided 300MW of production line equipment to the customer in 2015 but had only received around US$20 million that was attributed as an initial down payment. 

Hanergy Thin Film failed to mention that aspect in its latest financial filing cancelling the deal. Indeed, the company noted at the end of the document that both the original sales contract and service contract would remain in ‘full force and effect.’

The cancellation of the Shangdong Macrolink supply and service contract is the last of a number of similar sized and valued deals with other companies that had no previous PV manufacturing experience, while all had similar stock issue structures that would have been of higher value to the customer than the equipment and service contracts. 

The string of deals were key to Hanergy Thin Film’s rapidly rising share price that valued the company at more than US$39 billion before crashing and trading halted nearly a year ago. 

Tags: bipv, a-si thin film

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