United PV to buy 40MW in China

United Photovoltaics and Huabei Expressway may jointly acquire a majority stake in a company that owns a 40MW ground-mount PV plant in China’s Inner Mongolia region.

The two sides are now negotiating to potentially buy a 93.68% in Guodian Kezuohouqi Photovoltaics, which runs a 40MW, grid-connected solar project in Kezuohouqi, near the border with Liaoning province in northeast China.

Zhangjiagang-based PV group Jiangsu Yongneng currently owns 93.68% of Guodian Kezuohouqi, while Guodian Naiman Windpower holds a 6.32% stake.

Under the terms of the tentative agreement, Shenzhen-listed Huabei Expressway will buy a 84.31% stake in Guodian Kezuohouqi for roughly 67.4m yuan ($10.97m), United Photovoltaics said in a statement to the Hong Kong stock exchange.

United Photovoltaics, meanwhile, will purchase 9.37% of Guodian Kezuohouqi for roughly 7.5m yuan.

Once the agreement is finalised, Huabei Expressway will appoint three directors to sit on the board of Guodian Kezuohouqi, while United Photovoltaics will choose one, with an additional board member to be selected by Guodian Naiman Windpower.

One of the board members chosen by Huabei Expressway will serve as chairman of Guodian Kezuohouqi.

Huabei Expressway and United Photovoltaics will then respectively inject 297.7m yuan and 33m yuan into Guodian Kezuohouqi.

Following this capital injection, Huabei Expressway will own 88.89% of the company, while United Photovoltaics will hold a 9.88% stake.

After three years, United Photovoltaics will have the option of expanding its stake by purchasing equity from Huabei Expressway, as long as the return on investment reaches 8% per year or 24% for the entire three-year period.

United PV, a leading solar project investor in China, changed its name from Goldpoly last February.

In June, China Merchants New Energy (CMNE) raised its stake in the company to 19.18%.

By the end of 2013, United PV was running 531.7MW of solar capacity in China.