Units of Canadian Solar, Jinko apply for IPOs on China's STAR Market

Source: Shanghai Stock Exchange

June 28 (Renewables Now) - Canadian Solar Inc (NASDAQ:CSIQ) and JinkoSolar Holding Co Ltd (NYSE:JKS) announced today that subsidiaries of each of them have separately applied to list on the Shanghai Stock Exchange's Sci-Tech innovation board, also known as the STAR Market.

The two solar module manufacturers unveiled their intentions to pursue an initial public offering (IPO) for their respective units at different times last year.

Canadian Solar made its initial announcement in July 2020 after a special committee of independent directors had concluded a review of the available strategic alternatives. It said, though, that it was undetermined at the time whether the IPO would be on the STAR market or the Shenzhen Stock Exchange's ChiNext Market.

The company has now chosen to list its majority-owned subsidiary CSI Solar Co Ltd on the STAR Market because it is intended to support technology and innovative companies in China. CSI Solar will issue up to 541 million shares, not taking into consideration the over-allotment option. This will account for no less than 15% of the firm’s total share capital after the IPO. Presently, Canadian Solar owns a stake of about 80% in CSI Solar and that ownership interest is expected to drop to 64% following the IPO.

CSI Solar, made up of the Module and System Solutions and the China Energy business of Canadian Solar, will spend the IPO proceeds on a capacity expansion across the solar value chain, research and development (R&D) activities and additional working capital.

On the other hand, JinkoSolar made its floatation plans known in September 2020, saying that its principal operating subsidiary Jinko Solar Co Ltd, also referred to as Jiangxi Jinko, was targeting a listing in the next three years. It has now been disclosed that Jiangxi Jinko is proceeding with an offering involving between 10% and 25% of its total share capital upon completion. Assuming that 2.67 million shares are issued, JinkoSolar’s current 73.28% stake in the unit will drop to 54.96%.

Jiangxi Jinko intends to use the IPO proceeds to support the construction of production lines in Haining for 7.5 GW of cells and 5 GW of modules, as well as of an R&D centre there. The total cost of building the production lines is estimated at CNY 5.6 billion (USD 867m/EUR 727m) and some CNY 4 billion of that should come from the listing. The R&D site, in turn, will require an investment of about CNY 749.8 million, with CNY 500 million coming from the IPO. Jiangxi Jinko also hopes to set aside CNY 1.5 billion for additional working capital.

The completion of both IPOs is subject to the review process by the Shanghai Stock Exchange and the registration process by the China Securities Regulatory Commission, the two peers said.

(CNY 1.0 = USD 0.155/EUR 0.130)

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