Published Date: 2016/1/1 Security Code: 600401 Security Name: ST Hareon Solar
The Company and all members of the Board of Directors guarantee that there are no fraudulent disclosures, misleading statements or material omissions in this announcement, and shall be individually and jointly responsible for its truthfulness , accuracy and integrity.
1. The overview of the cooperation framework agreement with United Photovoltaics for 930MW PV power plants investment
Hareon Solar Technology Co., Ltd. (hereinafter referred to as the “Company”) on May 13, 2015 released “The announcement of cooperation framework agreement between Hareon Solar and United Photovoltaics on 930MW PV power plants investment” (File No.: 2015-084). The company and United Photovoltaics Group Limited (hereinafter referred to as “United PV”) signed the cooperation framework agreement regarding 930MW PV power plants investment (hereinafter referred to as “framework agreement”), involving the total transaction amount of about RMB 8.8 Billion.
2. The progress of the framework agreement
a. As of the announcement date, the Company has received two prepayments from United PV totaling HKD 500 Million (or around RMB 419 Million).
b. As of the announcement date, Keeping Phase-II 30MW, Yuepuhu 20MW, and Wuwei Phase-I 50MW large-scale PV power plants have completed the grid connection, and can be delivered to United PV. The Company is actively negotiating the transaction details with United PV.
c. The company is also actively working on the construction and grid connection work of other PV projects agreed in the framework agreement.
3. Clarification to media reports
Recently, the Company has noticed media reports, such as “United PV wants back the prepayment of HKD 1bn making the operation more difficult for ST Hareon”, “RMB 8.8 Billion PV plants acquisition deal will fall apart, smashing Hareon’s hope on removal of special treatment”, “Huge compensation and delisting are almost a foregone conclusion”. Some of of the contents and facts in these reports are not accurate, and the Company is issuing the following clarifications:
a. Up to now, the Company has accumulatively received the prepayment of HKD 500 Million from United PV, which has not been counted in the Company’s income statement;
b. Regarding the media report “Hareon is facing the huge compensation due to the failure of delivering agreed PV plants to United PV by Dec 10, 2015; the risk exposure will reach RMB 500-800 Million” According to the framework agreement, the delivery timing and quantity of the projects are flexible, and the presumed delay will not lead to default. Furthermore, the company does not foresee any material breach of the framework agreement; therefore, currently there is no compensation risk of RMB 500-800 Million as reported in some media reports.
c. Regarding the media report “Hareon has to ensure the delivery conditions of above 17 PV plants to be met by Dec 10, 2015, otherwise the Company should either unconditionally provide the completed PV plants with the same scale and conditions as the PV plants mentioned above or face the huge compensation.” The framework agreement stipulated that the Company should unconditionally provide plants with the same scale and conditions mentioned above to replace the projects which do not comply with the conditions, if the company fails to fulfill the conditions within regulated time. United PV has the option to postpone payments for those projects which fail to meet the requirements.
d. For PV projects, as there are many uncertain factors during the project development and construction (e.g. policy implementation, capital allocation, weather and other conditions affecting construction and grid connection), which may impact the on-schedule delivery of projects. Both sides have left room in the framework agreement for further negotiation on project delivery. The PV projects under the framework agreement continue to move forward in orderly timely manner, while facing some schedule delays.
e. A gentle reminder from the company to investors: <China Securities Journal>, <Shanghai Securities News>, <Securities Times>, <Securities Daily>, and <Shanghai Stock Exchange http://www.sse.com.cn> are the Company's designated media outlets for information disclosure. All of the Company’s information is and shall be formally disclosed through the above media outlets. We hope all investors make informed and rational investment decisions and are aware of the investment risks.
By order of the Board
Hareon Solar Technology Co., Ltd.
31 December 2015