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SolarOne gets $100m Korea loan

China’s Hanwha SolarOne has obtained a $100m three-year loan facility from the Export-Import Bank of Korea, underscoring the benefits of its Korean ownership at a time when credit is tightening significantly in China.

The Qidong-based vertically integrated PV manufacturer will pay interest of 1.99% per annum, on top of three-month LIBOR.

“We continue to be fortunate to access relatively low-cost funding from offshore sources,” says chief financial officer Jay Seo.

“This new capital will enhance our ability to support current working capital needs, continues our shift of loans from short to longer term, and allows some flexibility in developing our business strategies for the future.”

In 2010 the Hanwha Group, a Korean conglomerate, acquired a controlling minority stake in the company then known as Solarfun, later rebranded to Hanwha SolarOne.

Out of its manufacturing facilities in Jiangsu province, loss-making SolarOne has capacities of 1.5GW, 1.3GW and 800MW – for modules, cells and wafers, respectively.

Having reported a net loss of 1.56bn yuan ($250m) last year, SolarOne, like a number of its strongest rivals, returned to gross profitability in the first quarter of 2013 – albeit with a modestly negative operating income and cash flow.

Yet SolarOne is unique in its access to both Korean and Chinese financial institutions, a big advantage over its purely Chinese rivals. Last December the Bank of Beijing offered New York-listed SolarOne a 3bn yuan one-year credit line to aid its push into downstream project development.

Last month SolarOne chief executive Ki-Joon Hong noted that the company is finding “continued synergies with our parenet company Hanwha”.

Among other investments in the solar space, Hanwha, which is a major international chemicals player, intends to add PV-grade polysilicon production to its portfolio.

Despite its Korean ownership, Hanwha's Chinese manufacturing base means it would be hit hard by anti-dumping tariffs in the EU. Germany alone accounted for more than 40% of sales last year, although that figure fell sharply in the first quarter of 2013.

Last year Hanwha beat out Samsung-backed Isofoton to acquire bankrupt German PV giant Q-Cells, although it remains to be seen how – or if – it will be integrated into SolarOne.

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