AsianFin -- Shares of Tongwei tumbled after the Chinese solar silicon giant announced plans to raise 10 billion yuan ($1.4 billion)from external investors to ease financial pressure and boost competitiveness, as plunging prices and losses threaten its bottom line.
Tongwei closed down 4.3% at 19.13 yuan ($2.64) per share in Shanghai, hitting its lowest level in over six months.
The Chengdu-based firm revealed on March 28 that its subsidiary Yongxiang will receive capital injections from major domestic financial institutions. The funds will be used primarily to repay debt and improve liquidity, the company stated.
Following the investment, Tongwei’s stake in Yongxiang will drop from 100% to no less than 73%.
The final list of investors is still being finalized, but Industrial and Commercial Bank of China Financial Asset Investment, Citic Financial Asset Management, and Yongan Futures have already signed agreements. Four more major banks or asset managers are in the final stages of signing, while others await internal approvals, according to Tongwei.
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