Shunfeng acquires majority stake in Suniva for US$57.8 million

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Clean energy firm and PV developer Shunfeng International Clean Energy (SFCE) has acquired a majority stake (63.13%) in US-based solar cell and module manufacturer Suniva with an investment of US$57.76 million.

Shunfeng, which owns module manufacturer Wuxi Suntech, will make a cash contribution of US$12 million to Suniva with the remainder of the US$58 million to be settled through the issuance of more than 70 million shares.

An SFCE spokesperson told PV Tech that the cash and shares would be used for “US market expansion”.

In a filing on the Hong Kong stock exchange, Shunfeng said the acquisition “could further strengthen the company’s global position in high efficiency cells manufacturing at affordable costs, and more importantly enable the company to reap the huge potentials of the solar market in the United States”.

In July 2014, Suniva announced it would expand its US manufacturing capacity by 200MW. Suniva today announced it had started this same expansion, and targets a total capacity of 400MW. The SFCE spokesperson said the expansion would involve cells and modules.

Finlay Colville, head of Solar Intelligence at PV Tech’s publisher Solar Media, said: “Suniva has been somewhat of an anomaly since its formation, largely focusing on domestic module supply, and being one of the few cell makers to have production within the US. While the injection of funds from China may appear to be good news, when this will really materialise and in what format, remains to be seen.”

Colville added that Shunfeng’s strategy regarding the US market was interesting, given that peers across Asia, including c-Si manufacturers in Korea and Southeast Asia have amassed enough supply deals with US installers and EPCs in the past 12-18 months to not need to look into US-based manufacturing facilities.

Shunfeng’s annual report for the year ended 31 December 2014, said that the company sold 645MW modules globally, but just 26.1% of the company's total revenue was from overseas.

Colville said: “Whether Shunfeng's approach is successful will ultimately take much more than accessing domestic manufacturing facilities or indeed adding new capacity. Whether Shunfeng can secure volume business supply is yet to be seen, a situation that may confine deliveries to regional one-off deals on a case-by-case basis.”

However, John Baumstark, chairman and chief executive officer of Suniva, said: “This expansion was encouraged by the US market’s interest in high-quality, high-value American-made solar products.”

The Hong Kong stock exchange filing also said that Suniva had a net loss after taxation of US$44.4 million in 2013, which was followed by a net loss of US$15.5 million in 2014. Meanwhile the audited total asset value of Suniva as at 31 December 2014 was around US$74.6 million.

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