PRC silicon producer enters alliance with Korean chemical company

China-based Solarfun Power Holdings (Solarfun) will enter into a strategic relationship with Korea-based Hanwha Chemical Corporation (Hanwha). This includes an agreement by Hanwha Chemical to purchase over 36 million ordinary shares from Solarfun for US$78 million. Solarfun will utilise the proceeds from the investment to fund its expansion plans and for general corporate purposes. It is a vertically integrated manufacturer of silicon ingots, waters and photovoltaic cells and modules.

Additionally, Hanwha has entered into separate agreements to acquire a company owned by Solarfun's Chairman from Good Energies II, a US investment firm focusing on renewable energy, and Yonghua Solar Power Investment Holding. After the purchase is complete, Hanwha will own 49.99% of Solarfun's outstanding shares and hold a 49.99% voting interest in Solarfun. An independent committee of the board of directors negotiated the terms of the Solarfun share purchase agreements and shareholders agreement.

Shearman & Sterling advised Solarfun, Paul Weiss Rifkind Wharton & Garrison represented Good Energies, and O'Melveny & Myers acted for the independent committee. Hanwha was advised by Paul Hastings Janofsky & Walker and Shin & Kim.