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Two years after a spectacular stock plunge and trading suspension, Chinese solar firm Hanergy has returned to its core thin film solar business with a Rmb2.2bn ($328m) deal to build a production facility in the coal-choked city of Datong.

The deal marks a return to public fundraising by Hanergy founder Li Hejun, who for some months in 2015 ranked as China’s richest man. Mr Li has not been silent over the past two years, which he has spent battling Hong Kong regulators to allow Hanergy stock to resume trading while promoting grandiose plans to develop solar-powered automobiles.

The Datong deal signed last week is the first investment commitment by Hanergy since its suspension. Together with the Datong city government and Datong Coal Mine Group, one of China’s largest state-owned coal miners, it will build a 300-megawatt production line as part of a planned photovoltaic industry zone, according to the city.

The deal comes as China promotes solar power and other non-fossil fuel energy sources to help combat pollution and stimulate economies ravaged by a four-year commodities downturn that began in 2012. 

“Social capital and institutional investors trust in Hanergy’s thin-film technology and are actively participating in the deal,” Hanergy said, in an emailed response to questions. It will hold 20 per cent of the joint venture while Datong Coal Mine will hold 50 per cent. The city government will hold the remaining 30 per cent, according to the local planning bureau. 

Hanergy’s stock suspension was a “disaster” for the company, Mr Li said at the time, depriving it of a funding channel to service loans and funds raised through China’s high-interest shadow financing sector. In its 2015 IPO prospectus, Hong Kong-listed Bank of Jinzhou revealed that it had $440m in exposure to Hanergy debt. 

In a series of reports before the 2015 crash, the Financial Times detailed Hanergy’s reliance on shadow financing and the unusual pattern of trading in its Hong Kong shares, which rose in the last 10 minutes of the trading day.

Mr Li resigned from Hanergy’s Hong Kong-listed unit a year ago ‘to strengthen corporate governance’, amid talks with the Hong Kong regulator. Two other Hanergy subsidiaries are listed on the National Equities Exchange and Quotations (NEEQ), a Beijing-based over-the-counter stock trading platform. 

Chinese media have reported that Hanergy relied on bank loans taken to fund the construction of new factories and to pay off previous loans. Two of those facilities, in the central city of Nanjing and the northeastern development zone Caofeidian, will complete test runs at the end of this year, Hanergy said this week in response to FT queries. 

The latest project in Datong will have a registered capital of Rmb700m, a local official said, with the remainder of the investment financed by the two companies. However, an official from Datong Group told the FT that Datong Group and Hanergy have not yet discussed how the project will be financed. 

It will use technology developed by the German solar company Solibro, one of four overseas solar developers that Hanergy bought a few years ago. Hanergy’s plans for solar-powered vehicles and solar-powered garments largely draw on different technology developed by the US-based developers in which it has invested. 

Earlier this year, Hanergy agreed to establish a joint lab with bike sharing start-up Mobike, to research the use of thin film solar on bicycles. A Mobike spokesperson later clarified that the company has research agreements with many solar power firms.

This article has been amended to clarify the circumstances in which Mr Li resigned from Hanergy

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