United PV sheds 70% of PV cell unit

China’s United Photovoltaics will sell a 70% stake in its wholly owned solar cell production unit to Power Solar Investments for HK$217m ($28m).

United PV acquired the solar cell manufacturer, Fortune Arena, in 2010. It will continue to hold a 30% stake in the company, which is based in Quanzhou, in eastern China’s Fujian province.

However, Fortune Arena will no longer be a wholly owned group subsidiary upon completion of the share disposal.

United PV decided to sell the stake in Fortune Arena because in recent years the solar cell unit has struggled under the weight of excess inventory and the impact of US and European anti-dumping duties on China-made PV kit.

Hong Kong-based United PV expects to incur a loss of roughly HK$173m on the share disposal.

The company, whose largest shareholder is solar investor China Merchants New Energy Group (CMNE), said in a statement to the Hong Kong stock exchange that it would use the proceeds from the stake sale to support capital expenditure and the group’s working capital needs.

As of 30 June, 2014, United PV owned roughly 532MW of solar capacity throughout China.

In August, it said it would team up with Huabei Expressway to jointly acquire 93.68% in Guodian Kezuohouqi Photovoltaics, which runs a 40MW solar project in northeast China.

In July, United PV bought a 20MW solar project in western China’s Qinghai province for 43 million yuan ($6.9m).