Hanwha Chemical buys around USD$78 million worth of Solarfun shares

Hanwha Chemical Corporation, based in Korea, has bought around USD$78 million worth of shares in China-based Solarfun Power Holdings Co., Ltd. under a new strategic agreement between the two companies. In addition, it has entered into separate agreements to acquire shares from Good Energies II LP and Yonghua Solar Power Investment Holding Ltd. As a result, it now owns 49.99 percent of Solarfun's outstanding shares and holds a 49.99 percent voting interest in the company.

Hanwha Chemical Corporation holds a 49.9 percent voting interest in the company. Image: Solarfun Power Holdings.

The senior management team of Solarfun will remain with the company upon completion of the transactions. It is expected that three designees from Hanwha Chemical will be nominated to serve on the Solarfun Board and that one of the Hanwha Chemical designees will be elected Chairman of the Board. The remaining four members of Solarfun's Board will remain independent.

Dr. Ping Peter Xie, CEO and president of Solarfun, commented: "We are excited to have Hanwha Chemical as a strategic investor and partner. With its substantial financial resources, extensive global relationships and proven expertise in building energy projects, the relationship with Hanwha will be invaluable to Solarfun as we continue to grow our business and penetrate new markets."

Ki-Joon Hong, CEO and President of Hanwha Chemical, added: "We see many opportunities for the diversified affiliates of Hanwha Group to work jointly with Solarfun to achieve its business plan, which we expect to deliver growth for both Solarfun and Hanwha. We share a common vision for Solarfun: to make it our flagship vehicle in the solar business and to build one of the largest and leading solar companies in the world. We will work closely and constructively with Dr. Xie and his strong management team to make that vision a reality."

In connection with the transaction, Hanwha Chemical and the company will enter into a shareholders agreement that will provide for, among other things, certain governance rights for Hanwha Chemical, including board representation, conveyance of voting rights commensurate with economic interest, consent rights and registration rights, and certain obligations of Hanwha Chemical, including transfer restrictions and standstill arrangements.

Solarfun has said it intends to use the proceeds from the investment to fund its expansion plans and for general corporate purposes.