Scandal-hit Hanergy Thin Film (HTF) has appointed China International Capital Corp (CICC) to find a strategic investor, a move it hopes will shore up its finances and help its shares resume trading, two sources with knowledge of the matter said.HTF is under investigation by the Securities and Futures Commission (SFC) after its shares crashed suddenly in May, a case that has raised concerns about possible widespread market manipulation in Hong Kong, denting the appeal of the Asian city as a major financial centre.
In a bid to revive its fortunes, the Chinese solar technology company has been seeking a strategic investor for the past six months, but it has now decided to enlist one of China’s oldest investment banks to help it as its uncertain financial future is scaring off investors, one of the sources said.”Despite (HTF Chairman) Li Hejun’s strong connections, no one would want to put money into this hole now; you don’t know when it’ll ever start trading again,” the source said.
Both sources declined to be named because the matter remains confidential. HTF and CICC did not respond to repeated attempts by Reuters for comment.Hanergy shares staged a spectacular five-fold rally over nine months before suddenly crashing 47 percent in a few frantic minutes of trading on May 20. It was the last day they traded.Sources familiar with the SFC probe have told Reuters that the investigation centres on possible market manipulation. The SFC has confirmed it was investigating Hanergy, but has declined to give any details.
Li, whose share gains on HTF made him one of China’s richest men, sold in December a six percent stake in the company at a steep 95 percent discount to HTF’s last traded share price, regulatory filings show.Several equities analysts who used to cover HTF have long dropped their coverage. “I doubt it will ever trade again,” one analyst, who declined to be named because of the sensitivity of the Hanergy case, told Reuters.HTF offered in July to severe its links with mainland parent Hanergy Holding, its main source of revenues, and its affiliates in an attempt to address a SFC request for more corporate accounts disclosure.
But it decided last week to ditch this plan as it needed more revenues.
“The SFC considered that the restructuring proposal was not able to/failed to adequately address its concerns and accordingly, the company did not implement the restructuring proposal,” HTF said in the statement last week, where it also predicted a significant loss for the year. (Additional reporting by Umesh Desai; Editing by Lisa Jucca and Miral Fahmy)