Actis sells silicon manufacturer stake

The firm has sold its stake in Chinese silicon wafer manufacturer Shunda Holding to a former portfolio company.

Actis, an emerging markets fund manager, has exited its investment in Shunda Holdings, a Chinese manufacturer of mono-crystalline silicon ingots and wafers. The firm sold its stake to Suntech Power Holdings, which is a manufacturer of photovoltaic cells, and another undisclosed investor.

The firm led an $82 million (€52 million) investment in Shunda in 2006 of which its investment was $40 million with the rest being contributed by local investment firms Waichun and Jolmo.

Suntech said in a statement that it purchased Actis’ and Waichun’s stakes in Shunda for a total of $98.9 million. Actis declined to disclose the financial details of the deal.

Suntech Power is a China-headquartered, NYSE-listed company that was once a part of Actis’ portfolio. Actis invested in Suntech in 2005, and exited the investment last year after helping it to list on the NYSE. The company specialises in the design, manufacture and sale of photovoltaic cells, modules and systems, of which it is one of the world’s largest producers.

According to a statement from Actis, both companies will benefit from the transaction as it will lead to closer vertical integration in the solar energy production chain. Shunda manufactures poly-crystalline silicon, an essential raw material for the solar power industry, of which there is a shortage in supply globally. This raw material is used to make silicon ingots and wafers, which are then used by companies such as Suntech to make solar cells and panels that create solar power.

Lim Meng Ann, Actis’ head of China, said in a statement that “through this transaction, Shunda develops a close relationship with an important customer and Suntech gains reliable access to a raw material that is currently in short supply” and called the deal “a win for all sides”.

Actis’ investment in Shunda was made from its $250 million China Fund II.