China Merchants invests $67m in United Photovoltaics

Hong Kong-listed United Photovoltaics, which is controlled by China Merchants New Energy Group issued the bonds to New Energy Special-purpose Asset Management Plan I, an entity owned by China Merchant Fund, according to a filing. The instruments have a three-year tenor, a coupon of 7.5% and a conversion price of HK$1.03 per share.

As part of the deal, United Photovoltaics has signed an agreement with Shenzhen China Merchants Yinke Investment Management, and China Merchants Zhangzhou Development Zone Trenda Solar to acquire an 80-megawatts (MW) solar power plant in Xinjiang.

"At the macroeconomic level, new energy is an important component in the national and global economy. As a major energy consuming country, China's energy consumption structure is unsound; hence the government now values the new energy development as a crucial component of national strategic development," Yingquan Li, deputy general manager of China Merchants Group and CEO of China Merchants Capital, said in a statement.

A few weeks ago, United Photovoltaics raised HK$1.26 billion ($160 million) from Ping An Insurance and an additional $30 million from China Orient Asset Management by issuing convertible bonds.

The firm recorded a net profit of HK$392 million in the first half of 2014 compared to a loss of HK$912.7 loss a year earlier. Revenue grew to HK$238 million in the first six months last year, up from HK$157 million for the same period in 2013.

As of June, United Photovoltaics operated 13 solar power plants covering covering the provinces and regions of Guangdong, Fujian, Gansu, Jiangsu, Qinghai and Inner Mongolia, with an aggregate installed capacity of 467 MW.

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