Solar Power, Inc. (OTCBB: SOPW), a vertically-integrated solar PV (photovoltaic) developer, today announced that its wholly owned subsidiary, SPI Solar Power Suzhou Co., Ltd. has entered into a framework purchase agreement with ZhongNeng GuoDian New Energy Development and Investment Jiangsu Co., Ltd., with the intention to acquire six PV projects currently under construction in China, and another framework purchase agreement with ZhongNeng GuoDian Green Ecological Cooperation and Development Jiangsu Co., Ltd. , with the intention to acquire the equity interest in ZhongNeng New Energy.
SPI Meitai Suzhou intends to acquire the six projects under construction in China from ZongNeng GuoDian, including a 40 MW project in Chifeng City, 60 MW in Kezuo County, 50 MW in Shangdu County, and 30 MW in Chayou County, all in Inner Mongolia, as well as a 130 MW project in Zhongwei City, Ningxia and 50 MW in Yanyuan County, Sichuan. Grid connection for these projects is expected to take place from the end of 2014 to the middle of 2015. SPI Meitai Suzhou will pay a deposit of RMB140.0 million (U.S. $22.9 million) in cash by November 20, 2014 to secure the agreement. The final purchase price for the six projects will be decided after further due diligence when the projects are completed.
SPI Solar intends to acquire the 100% equity interest in ZhongNeng New Energy at an aggregate purchase price of RMB100.0 million (U.S. $16.3 million), consisting entirely of SPI’s ordinary shares; 49% of the total consideration, or RMB49.0 million (U.S. $8.0 million) will be determined based on the Renminbi-to-U.S.-dollar exchange rate and closing price of SPI’s ordinary shares of U.S. $2.35 per share on October 22, 2014, or approximately 3.4 million ordinary shares, and 51% of the total consideration, or RMB51.0 million, will be based on the five-day averages of the trading prices of SPI’s ordinary shares and Renminbi-to-U.S.-dollar exchange rates prior to the closing date of the acquisition.
Subject to the terms and conditions of the framework agreements, SPI Meitai Suzhou and ZhongNeng New Energy will enter into a definitive purchase agreement for the purchase of the six projects by March 31, 2015, and SPI Meitai Suzhou and ZhongNeng GuoDian will enter into a definitive purchase agreement for the acquisition of ZhongNeng New Energy within five days thereafter.
SPI Solar plans to acquire more solar PV projects using SPI Meitai Suzhou as an investment platform.
Image: By Pete Stewart from Perth, Australia (Shanghai Skyline HDR) [CC-BY-SA-2.0], via Wikimedia Commons