Largest-ever solar energy merger in Taiwan to be completed in October

Taipei, The largest-ever solar energy deal in Taiwan, in which three major solar cell firms are merging to form a new company, is scheduled to be completed on Oct. 1, according to the three companies.

In the stock swap deal, Neo Solar Power Corp. will bring Gintech Energy Corp. and Solartech Energy Corp. fully under its corporate umbrella to create the largest solar energy company of its kind in Taiwan and the new company will be named United Renewable Energy Co. (UREC).

The three companies held separate board meetings on Friday at which the merger schedule was finalized and agreement reached to complete the deal in October.

As Gintech and Solartech are listed on the Taiwan Stock Exchange, the board meetings of the two companies also determined that the last stock trading day for their stocks will be Sept. 17.

As for Neo Solar, which will survive the merger but be renamed, a timeframe for any change in the trading of its shares has not been finalized, according to Neo Solar.

On Oct. 16, 2017, the three companies announced the mega merger, which aims to create a company with capital of NT$21.1 billion (US$687 million) that provides one-stop services from solar cell supply to back-end module production, thereby enhancing its competitiveness.

The three firms have said the new company will set its sights on the global market in a bid to reduce the local solar energy sector's over-dependence on the China market.

In the deal, Neo Solar is issuing up to 1.164 billion new shares for the stock swap. Under the agreement, one Gintech share will be swapped for 1.39 Neo Solar shares, while one Solartech will be exchanged for 1.17 Neo Solar shares.

The merger was approved by Taiwan's Fair Trade Commission in April before being greenlit by anti-trust regulators in Germany and China in February and March, respectively.

In January, the National Development Fund under the Executive Yuan decided to fund the new solar energy alliance, as part of the government's efforts to develop renewable energy.

The decision to invest in UREC was made at a time when the government is promoting its "5 plus 2" innovative industry policy, including the renewable energy business.

Local media have reported the fund is expected to invest up to NT$4.5 billion in UREC, while the new company plans to launch a private placement to raise capital by issuing up to 380 million new shares.

According to Neo Solar, once UREC begins operations, the company is expected to generate about NT$50 billion in sales in the first year and post NT$90-NT$100 billion in annual revenue within five years.

However, the three companies merging to form UREC remain unprofitable. In the first quarter of this year, Neo Solar, Gintech and Solartech posted a loss per share of NT$0.63, NT$1.07 and NT$0.57, respectively, after a loss of NT$4.08, NT$2.93 and NT$2.51, for 2017.

Source: Focus Taiwan News Channel