ReneSola Ltd (NYSE: SOL; AIM: SOLA), a vertically integrated Chinese manufacturer of solar products, announced that it has signed a share purchase agreement for Dynamic Green Energy Limited. ReneSola will acquire 100% of the shares in Dynamic Greenin exchange for 26,787,210 newly issued ReneSola ordinary shares and $10 million in the form of a convertible promissory note issued by ReneSola.
The deal is worth approximately $325 million.
Dynamic Green, through its subsidiary Jiawei Solarchina Co., Ltd. and other Chinese operating subsidiaries, manufactures solar products ranging from ingots to photovoltaic (PV) modules and provides original equipment manufacturing (OEM) services for solar manufacturers.
Dynamic Green owns and operates several manufacturing facilities in different cities in China, including ingot and wafer manufacturing facilities in Sanhe, Hebei province, an upgraded metallurgical grade silicon manufacturing facility in Guiyang, Guizhou province, module and cell manufacturing facilities in Wuhan, Hubei province, and OEM facilities in Shenzhen, Guangdong province.
Dynamic Green provides a substantial amount of sales and OEM services, particularly sales and services to its major customers such as Evergreen Solar, Inc. (Nasdaq ESLR) and SunPower Corporation (Nasdaq: SPWRA; SPWRB), under multi-year, long-term contracts. The long-term contracts for OEM services require Dynamic Green to provide a range of processing services, including processing of ingots and solar wafers as well as PV cells and modules. Dynamic Green intends to continue to perform under these contracts after the acquisition.
"ReneSola’s acquisition of Dynamic Green will significantly increase our OEM capabilities and will accelerate the implementation of our strategy to become a fully integrated solar company," said Mr. Xianshou Li, ReneSola’s CEO.
As of June 30, 2009, Dynamic Green had an annual PV module manufacturing capacity of approximately 155 megawatts (MW), an annual PV cell manufacturing capacity of 25 MW and annual ingot and solar wafer manufacturing capacities of approximately 180 tons, or 37.5 MW, and approximately 360 tons, or 75 MW, respectively. As of the same date, Dynamic Green had an annual upgraded metallurgical silicon manufacturing capacity of 50 tons. Dynamic Green has approximately 1,600 employees.
In 2007 and 2008, Dynamic Green had net revenues of $18.1 million and $53.3 million, respectively, and gross profit of $6.1 million and 16.8 million, respectively. Dynamic Green had loss from operations of $9.6 million in 2007 (including $14 million in share based compensation expenses) and income from operations of $9.9 million in 2008. Dynamic Green had a net loss of $10.4 million in 2007 and net income of $5.6 million in 2008. In the first half of 2009, Dynamic Green estimates that it had net revenues of approximately $15 million and gross profit of approximately $3 million. Dynamic Green expects to incur a net loss in the first half of 2009..
Loading...