Solar cells. Author: Steve Rainwater. License: Creative Commons: Attribution-ShareAlike 2.0 Generic
The head of Chinese solar products maker JA Solar Holdings Co Ltd (NASDAQ:JASO) has made a non-binding proposal to buy out the company in a going-private transaction, JA Solar announced on Friday.
Together with his British Virgin Islands-based vehicle Jinglong Group Co Ltd, chairman and CEO Baofang Jin offers to acquire the JA Solar shares he does not already own at a price of USD 9.69 (EUR 8.63) per American Depositary Share (ADS), or USD 1.938 per ordinary share in cash. The proposed price is a premium of 20% to JA Solar’s closing stock price on June 4, 2015.
At present, Jin and his company hold a stake of about 15.6% in the solar products manufacturer. The buyer group intends to use a mix of debt and equity capital to bankroll the transaction.
In a letter to JA Solar’s board of directors, Jin requested that the potential sources of financing receive the right to carry out due diligence and noted that he is ready to negotiate and finalise a definitive agreement expeditiously. The CEO also mentioned that the proposed buyout will provide superior value to the company's shareholders.
In turn, JA Solar’s board said it will form a special committee of independent directors to consider the offer.
Skadden, Arps, Slate, Meagher & Flom LLP serves as the suitors’ US legal counsel.
Shanghai-based JA Solar last month said its first-quarter net profit dropped by 58.8% year-on-year to CNY 35 million (USD 5.6m/EUR 5m) as photovoltaic (PV) cell shipments during the “seasonally slow period” decreased. The company guided for cell and module shipments of between 680 MW and 720 MW in the second quarter of 2015, after 681.5 MW in January-March.