Apollo Solar Energy Technology Holdings Limited Awards a Sales Contract Worths approx. HK$ 20 Billion with Hanergy

Introduces Hanergy as a Strategic Investor Consolidates Apollo's Leading Position in Global Market

Jun 17, 2010, 00:09 ET from Apollo Solar Energy Technology Holdings Limited

HONG KONG, June 17 /PRNewswire-Asia/ -- Apollo Solar Energy Technology Holdings Limited ("Apollo Solar" or "the Group") (HKEx: 566) announces that on 20 May 2010, Fujian Apollo (an indirect wholly-owned subsidiary of the Group) and Hanergy (unofficial English translation as Hanergy Holding Group Limited) entered into the principal sales contract of providing Hanergy equipment and integrated turnkey solution for the manufacturing of silicon-based thin film solar PV modules, for a total contract sum of US$2.55 billion (equivalent to approximately HK$19.84 billion). An application has been made to the Stock Exchange for resumption of trading in the shares with effect from 9:30 am on 17 June 2010.

Apollo Solar is also pleased to announce that the Group has introduced Hanergy as a strategic investor and one of the major shareholders of the Group. On 20 May 2010, the Group and Hanergy entered into the principal subscription agreement pursuant to which Hanergy has agreed to subscribe, or procure the Hanergy nominee to subscribe, for 4,911,528,960 subscription shares at the subscription price of HK$0.239 per subscription share.

Mr. Peng Li Bin, Executive Director of the Group said, "Hanergy is one of the largest and leading non-state-owned clean energy generation enterprises in China. Having Hanergy to be our strategic investor and one of our major shareholders serves to demonstrate that the technology level and R&D capability of Apollo have been recognized by Hanergy. The mega order will generate large amounts of cash flow to Apollo, thus will highly enhance its R&D resources and increase the capital investment of Apollo's R&D team, strengthening our R&D capability. It can also significantly enlarge the market share of Apollo in the global equipment and integrated turnkey solution for the manufacturing of silicon-based thin film solar PV modules supplier market and further strengthen Apollo's leading position."

About the Sales Contract

The subject matter to be sold by Fujian Apollo to Hanergy under the sales contract is the equipment, which will be divided into three batches of production lines and to be produced and delivered by Fujian Apollo in three phases. Each batch of the production lines consists of, among other items, 140 units of PECVD equipment and 30 units of PVD equipment, which are the core equipment of the new turnkey equipment, tools and machinery of the solar PV modules production system. Fujian Apollo shall complete the delivery of all equipment for each batch of the production lines within six months after the payment of the first installment of the prepayment for such batch of the production lines.

The aggregate equipment consideration is US$2.55 billion (equivalent to approximately HK$19.84 billion) which was arrived at by reference to the historical selling price of similar equipment with similar capacity for the production of the thin film solar PV modules. The equipment consideration for each batch of production lines is US$850 million (equivalent to HK$6.613 billion).

About the Subscription Shares

Hanergy will subscribe for, in three tranches, an aggregate of 4,911,528,960 subscription shares, representing approximately (i) 106.49% of the existing issued share capital of the Company, and (ii) 51.57% of the issued share capital of the Company as enlarged by the issue of such subscription shares. The subscription of shares will take place on the third business day after the down payment 50% of contract sum is made by Hanergy for each of the three batch of production lines. The fist tranche of shares will be locked up for a period of six months. Hanergy will appoint three directors to the board of Apollo and two of them are executive directors.

The gross proceeds of the subscription are approximately HK$1.17 billion. The Directors intend to utilize the net proceeds of the subscription to (i) increase the production capacity of the Group so as to fulfill the sales order placed by Hanergy under the sales contract, (ii) invest in research and development activities and (iii) expand solar-related technology or business by way of acquisition.

About Apollo Solar Energy Technology Holdings Limited (HKEx: 566)

Apollo Solar Energy Technology Holdings Limited supplies equipment and provides integrated turnkey solution for the manufacturing of silicon-based thin film solar PV modules in the PRC. The Group manufactures specialized equipment for production of silicon based thin film PV modules, and sells the equipment to customers which produce thin film PV modules. The Group provides design, engineering and system integration service as well as optimally configured, high-performance equipment at highly competitive prices. The Group also provides original equipment manufacturing and co-licensing options as well as consultation services. Its equipment research and development team is also based in Beijing whereas its process research and development team is based in Quanzhou, PRC. Apollo Solar is the only proven thin film turnkey provider in China certified by both the TUV/IEC and the UL. Apollo has been added to Morgan Stanley Capital International (MSCI) Hong Kong Small Cap Index on 26 May 2010. The turnover of the solar energy business from 25 November 2009 to 31 December 2009 is HK$315,292,000, the gross profit is HK$ 234,941,000 and the profit before income tax is HK$231,436,000. The gross margin and profit before income tax margin reached 74.5% and 73.5% respectively. The audited profit amounted to approximately US$21 million which exceeds the 2009 profit guarantee by 42%.

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SOURCE Apollo Solar Energy Technology Holdings Limited