Hanergy: from inception to investigation

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    NexChange
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    With Hanergy proving to be a veritable Energizer bunny of headline-making, here’s a quick timeline of events at the company, from inception to investigation, just in case you missed anything.

    • 1994 – Hanergy is founded by Li Hejun to operate hydroelectric power plants.
    • 2000 – On the 28th of August, the company began construction of its first hydropower station. It becomes operational in 2 years and then they set their sights on wind energy.
    • 2009 – The company shifts to thin film-solar, a cheaper but less efficient 2nd gen solar panel, setting the stage for all the drama today. It’s subsidiary, Hanergy Thin Film goes through a backdoor listing in October according to a research piece on their site.
    • 2010 – Things start getting interesting.  Beginning 2010, the majority of Hanergy Thin Film’s revenue comes from sales to it’s parent company, the Hanergy Group. Meanwhile, to finance the final stage of construction of it’s Jinanqiao hydropower dam, the firm obtains a large, three-year $340 million trust product from China Credit Trust which charged 8.1% a year in interest. Revenue rights and shares of the dam were also pledged to 14 other trust companies.
    • 2011 – Using a huge block of shares of it’s Jinanqiao dam, the company secures a five-year, $4.8 billion credit line from the China Development Bank.
    • 2012 – Hanergy Thin Film acquires MiaSole, an accomplished thin film firm.
    • 2013 – The group adds another firm under its umbrella, this time acquiring gallium-arsenide solar developer Alta Devices. Elsewhere, company chairman and majority shareholder Li Hejun pledges 5 billion of his shares in Hanergy Thin Film to get a $67 million loan.
    • Just wanted to point out that that’s a lot of debt in 4 years
    • 2014 – Company’s stock begins it’s unusual, almost daily, uptick ten minutes before the market closes.
    • 2015 – The real action happens
    • January – The FT lifts the lid on the firm’s accounting practices, pointing out HTF’s dependence on its parent company and affiliates for sales.
    • February – Just as the company announces it’s ambition to build solar-powered cars, the FT opens the kimono on their various debts, which include high-interest P2P loans advertised online. They also point out that the firm just sold their jet and leased it back to free up some cash. CLSA also releases a scathing research piece on the company.
    • March – Li Hejun becomes China’s richest man just days before Bloomberg New Energy Finance blasts the company by stating that it’s thin film technology is still unproven in large-scale production and questioning why the firm does not have a comprehensive list of projects currently in the pipeline. Weeks later, the FT exposes the company’s irregular stock price behavior.
    • April – Citi releases a research piece stating that Hanergy’s thin film solar technology is not viable. This is soon followed by an investigative piece by local Chinese newspaper First Financial Daily detailing the company’s debts as well as stating that Hanergy’s project sites have either stalled or haven’t been working as promised. The report was deep-sixed by the end of the day but fortunately, was Barron’s was there to pick it up.
    • May 18 – Li Hejun buys a few shares in his company while at the same time, increases his short position on it to over 7% of his holdings. He also makes an offshore loan – his third in the past months – for $200 million using HTF shares as collateral.
    • May 20 – Hanergy Thin Film shares fall 47%, Caixin reports that Chinese institutions – holding HTF stock as collateral – were behind the fall. Reuters then reported that the company was under investigation for market manipulation.
    • May 22 – Bronte Capital releases photos of their visit to Hanergy, showing a ghost town in what should be a beehive of activity. Hilariously, solar panels at the site weren’t even pointed at the sun, raising a lot more questions about the company.
    • May 28 – After days of scrutiny, Li Hejun appears on Xinhua – China’s official news agency – dismissing claims that his company was under investigation and stated that Hanergy was doing a-okay. Hours later, the SFC issues a statement that they are in fact, investigating the energy firm.
    • May 31 – And here we are today. With the SFC – as well as the financial media – probing the company, things can only get more interesting here the next few months. Stay tuned.
    Photo credit: Jose Mesa via Flickr