Shanghai, China-based Solar EnerTech Corp. (OTC Bulletin Board: SOEN) has acquired two million shares of common stock of 21-Century Silicon, Inc., a polysilicon manufacturer based in Dallas, Texas for $1 million cash.
The two million shares acquired by the Company constitute approximately 7.8% of 21-Century Silicon’s outstanding equity.
Under the terms of this agreement, the EnerTech acquired two million shares of newly issued common stock at a purchase price of $0.50 per share, and would acquire an additional two million shares at the same per share price upon the first polysilicon shipment meeting the quality specifications set by EnerTech.
Related to the equity purchase agreement, EnerTech has also signed a memorandum of understanding (MOU) with 21-Century Silicon for a four-year supply framework agreement for polysilicon shipments. The first material polysilicon shipment from 21-Century Silicon is expected in 2Q09.
Based in Dallas, Texas, 21-Century Silicon is a privately held company that was founded by a group of semi-conductor industry veterans in 2005.
”Our relationship with 21-Century is a positive development for our business and further increases the visibility of our production supply,” commented Leo Young, CEO of Solar EnerTech. ”We are pleased to take this first step towards vertical integration with this agreement, and at the same time, to secure a polysilicon supply source at a time when demand and prices remain high. Polysilicon is a major expense for the production of our solar cells and modules and this relationship is designed to ensure that we have a steady polysilicon supply at a reasonable cost. It can also allow us to reduce our short term polysilicon supply contracts, and thus beneficially impact our overall margin performance.”
About Solar EnerTech Corp.
Solar EnerTech is a photovoltaic (PV) solar energy cell manufacturing enterprise based in Shanghai, China, where the Company has established a sophisticated 63,000 square foot manufacturing plant in Shanghai’s Jinqiao Modern Technology Park. Currently, the Company is capable of producing 25MW of solar cells from its existing production line and the Company is in the process of completing its second 25MW production line to better utilize capacity and meet expected future customer demand.
Solar EnerTech has also established a Joint R&D Lab at Shanghai University to research and develop higher efficiency cells and to put the results of that research to use in its manufacturing processes. Led by one of the industry’s top scientists, the Company expects its R&D program to help bring Solar EnerTech to the forefront of advanced solar technology research and production. The Company has also established a marketing, purchasing and distribution arm in Northern California’s Silicon Valley.
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