Chinese Solar Firm Hanergy Loses IKEA Partnership

HONG KONG—A Chinese solar-equipment manufacturer at the center of a probe by Hong Kong regulators has lost a high-profile partnership with IKEA Group to sell solar panels in Europe.

IKEA said on its website that its deal with the solar-panel maker, Hanergy Thin Film Power Group Ltd., ended Oct. 31 and that it would have a "new and even more attractive offer" for solar panels next year. A spokesman for Hanergy's parent company said he couldn't immediately comment.

Hanergy Thin Film sells rooftop solar-power kits to residential customers at IKEA stores in Europe, mostly in the U.K. The kits sell for around £ 5,200 (US$8,000) and come with a promise to cut typical household electricity bills in half.

Although the terms of the deal weren't disclosed, IKEA received a 10% cut of Hanergy's sales in exchange for giving Hanergy floor space to operate its kiosks, according to two people familiar with the matter.

Hanergy recently said it sold 800 kits in the first half of 2015. That was far below its ambition to eventually sell one kit a day at as many as 300 locations, which would translate into $200 million in annual profit, one of the people said. IKEA didn't immediately respond to requests for further comment.

Losing IKEA as a partner is a blow to Hanergy and its chairman, Li Hejun, who is embroiled in an investigation by Hong Kong's securities regulator, which has ordered the company's shares remain suspended pending the outcome.

Mr. Li saw shares in his Hong Kong-listed company plunge 47% in minutes in May after they rose more than fourfold earlier this year. Hanergy's rising stock performance had puzzled analysts and industry observers, mainly because its market share for solar panels was tiny. Earlier this year, Hanergy's market capitalization grew bigger than that of Sony Corp. and at one point briefly made Mr. Li the richest man in China, at least on paper.

Write to Wayne Ma at [e-mail]

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(END) Dow Jones Newswires

November 03, 2015 00:05 ET (05:05 GMT)

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