JA Solar to take 65% in Chinese silicon ingot maker for USD 39m

Jul 30, 2012 - Chinese equipment maker JA Solar Holdings Co Ltd (NASDAQ:JASO) said today it was to acquire 65% in domestic solar-grade mono-crystalline silicon ingot maker Hebei Ningjin Songgong Semiconductor Co for CNY 247 million (USD 39m/EUR 31.6m).

The transaction, which is to close by end-2012 subject to government nods, is expected to complement JA Solar's mono-crystalline silicon wafer slicing capabilities, the buyer noted.

The acquisition is part of a framework agreement between JA Solar and Japanese polysilicon and solar wafer producer M.SETEK Co, a unit of Taiwanese AU Optronics (TPE:2409). Due to the March 11 earthquake in 2011, M.SETEK was unable to make certain prepaid polysilicon deliveries to JA Solar's unit JA Hong Kong so the two parties struck the agreement this March to define the ways to settle the USD-69.1-million (EUR 56m) of outstanding prepayments.

Under the terms of the deal, M.SETEK has already repaid CNY 70 million to JA Hong Kong using dividends paid by Ningjin Songgong. It has also agreed to transfer its shareholding in the latter by the end of 2012 at an appraisal price. Finally, M.SETEK is to continue delivering polysilicon to JA Hong Kong under a new supply agreement, whose terms are yet to be determined.

Ningjin Songgong's operations are based in China's Hebei province. It has an annual mono-crystalline silicon ingot production capacity of 2,000 tonnes. Apart from the 65% that are to be taken by JA Hong Kong, JA Solar executive chairman Baofang Jin, who is also general manager of the target company, owns 32.7%. Third-party individuals hold 2.3% in Ningjin Songgong.

(CNY 1 = USD 0.157/EUR 0.128)
(USD 1 = EUR 0.815)

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