The chairman and CEO of Chinese solar company ReneSola Ltd (NYSE:SOL) is proposing to acquire the manufacturing business of the firm and the LED distribution division, whose value, net of assumed indebtedness, is negative USD 81 million (EUR 91m).
The preliminary non-binding proposal by Xianshou Li is dated June 13. The board of directors has formed a special committee of independent directors to consider the offer and other alternatives.
The targeted manufacturing business includes plants for the production of polysilicon, solar wafer and solar photovoltaic (PV) modules. Li is ready to assume related indebtedness and be compensated for that through the issuance of additional ReneSola American depositary shares (ADSs) to him at USD 4.50 apiece.
If the proposed deal is finalised, ReneSola’s remaining businesses would focus mainly on solar project development. In March the firm had a pipeline of over 1 GW of projects in various stages, including 707 MW "shovel-ready", and it said at the time it planned to construct over 550 MW in 2017.
“[..] the Board has just received the Proposal and has not had an opportunity to carefully review and evaluate the Proposal or make any decision with respect to the Company's response to the Proposal,” today’s statement says.
ReneSola reported a widened net loss of USD 34.7 million for 2016 on revenue of USD 929.8 million. Lower average selling prices (ASP) and lower shipments to external customers have been hurting its performance in the manufacturing division. Import duties on Chinese products also present a challenge.
Tomorrow, the company will be publishing results for the second quarter of 2017.
(USD 1 = EUR 0.89)
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