GREEN DEALS: Vestas vision

Vestas has a surprising position of strength in strategic talks with Mitsubishi, but a takeover from the latter is unlikely. Meanwhile, TRU confirms an appeal of a wind farm block, Q-Cells officially gets a buyer and the submission period for ARENA’s funding strategy ends.

Vestas, Mitsubishi

Hope springs eternal for investors in the world’s largest wind turbine maker, Vestas, with news it is in talks with Japan’s Mitsubishi for a strategic agreement. The news sent the battered share price of the company surging 19 per cent on Tuesday, exacerbating a strong recent run in the price of the company’s stock. There was some profit taking overnight however, with the company’s stock giving up 5 per cent.

Details of the potential agreement are scarce but it is believed the “ongoing dialogue” revolves around a cash injection from Mitsubishi in exchange for a sharing of Vestas’ technological knowhow in offshore wind and assistance in the US market.

Danish business news service Berlingske Business said sources close to the talks believed there was a strong chance an agreement would be forthcoming, with Vestas’ negotiating position strong despite its weakened financial state. The reason for this position of strength is Mitsubishi’s struggles in the key US market, which comes on the back of a costly patent dispute with GE.

"Mitsubishi has customers in the US, they cannot deliver on,” a Vestas source told Berlingske Business. “This could be fixed through a partnership to offer the same customers a Vestas turbine, whose reputation is better. This would both ensure Mitsubishi continued place in a crucial market and would allow Vestas to exploit excess capacity in US factories.” (My Danish not quite being up to scratch, the above translation has relied heavily on Google. The original Danish quote can be found here).

According to Reuters, the talks have been going on since March.

“If the dialogue results in an agreement, Vestas will make a company announcement on the issue immediately thereafter,” Vestas said in a statement on Tuesday.

There has been rumours of a takeover offer coming from Japan or China for Vestas throughout the year, but it is not expected the Mitsubishi talks would see such a circumstance eventuate. It could however, see an equity stake of as much of 20 per cent. The Danish firm is a key player in what the Danish government no doubt views as a strategic industry, so one suspects a takeover may struggle to get Danish approval anyway.

Q-Cells, Hanwha Solar One

Hanwha Chemical, which owns Hanwha Solar One, a top ten solar manufacturer, has overnight won approval from creditors for a takeover of bankrupt Q-Cells.

The deal with Hanwha sees the Korean group take on liabilities of around $A260 million as well as pay €40 million ($A48 million).

After a deal seemed sealed on Sunday, a last minute proposal from Spanish-based Isofoton threw the cat amongst the pigeons, but ultimately creditors stuck with Hanwha’s offer at last night’s meeting.

Back in 2008 Germany’s Q-Cells was the world’s largest solar PV manufacturer but it fell down in the face of the proliferation of Chinese firms that helped dragged selling prices sharply lower.

Hanwha Chemical is part of the South Korean-based Hanwha conglomerate which is involved in the retail, financial services and explosives sector (and even owns a baseball team).

TRUenergy, Stony Gap wind farm

TRUenergy has confirmed it will challenge a ruling against its $300 million Stony Gap wind farm.

Earlier this month the local council voted to block the 41-turbine development in what was the first wind farm knocked back by a local council since new regulations were passed in South Australia.

Quick takes:

-- JA Solar advised in a conference call this morning that it has made "significant progress" in Australia. "The Australian market has traditionally been dominated by the rooftop segment, but we expected significant growth in the commercial and utility segments there as related policies are finalising at the end of this year," CEO Peng Fang said.

-- CBD Energy has signed an Italian joint venture agreement with Westinghouse Solar, the company it is set to merge with this quarter.  Westinghouse will claim a 25 per cent stake (with the option to take up to a 50 per cent stake) in the profits from CBD’s commercial project pipeline in Italy, in exchange for $1.5 million.
In June, CBD completed the first of six planned 5MW projects in Italy, and has negotiated the sale of it to a third party off-taker for €12.5 million (closing is subject to verification due diligence).

-- Consultation over ARENA’s draft funding strategy has taken place in Melbourne, Perth, Brisbane and Darwin. In Melbourne around 100 independent renewable energy groups took part, with numbers of 35 in Brisbane, 25 in Perth and 15 in Darwin. “The ideas generated during the consultation meetings are now being synthesised and considered by ARENA staff. This advice will be considered and used to develop the final 2012-13 to 2014-15 general funding strategy,” the government body said. The time period for submissions has now ended with ARENA hoping to have a final funding strategy out before year’s end.