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Largest-ever solar energy merger in Taiwan announced

2017/10/16 19:41:25

Taipei, Oct. 16 (CNA) Three major Taiwanese solar cell makers on Monday announced a merger that will become the largest-ever deal of its kind in the Taiwan solar energy industry if it is completed.

Neo Solar Power Corp. (新日光), Gintech Energy Corp. (昱晶) and Solartech Energy Corp. (昇陽光電) held a news conference shortly after the stock market closed at 1:30 p.m. to say they have signed a letter of intent to push for a merger and create a company capitalized at NT$21.1 billion (US$701 million).

The three companies' boards of directors have approved the deal, they said.

After the merger, the new company is expected to provide one-stop services from solar cell supply to back-end module production to strengthen its competitive edge in the global market, the companies said.

Neo Solar Chairman Sam Hong (洪傳獻) said his company will be the surviving company and bring Gintech Energy and Solartech fully under its corporate umbrella in a stock swap.

Under the agreement, one Gintech Energy share will be swapped for 1.39 Neo Solar shares, while one Solartech Energy will be exchanged for 1.17 Neo Solar shares.

The deal is expected to be completed in the third quarter of next year, and the new company will change its name to "United Renewable Energy Co." (UREC, 聯合再生能源), Hong said.

The new company will try to solicit government funds for further investment, Hong said, at a time when the government is promoting "5 plus 2" innovative industries, including the renewable energy business.

He said the new company is expected to have a production capacity of 5GW for solar cells and 3GW for solar cell modules.

Local media reported the Cabinet's National Development Fund will take a stake in the new company by injecting NT$4.5 billion to NT$5 billion into UREC, with the Ministry of Economic Affairs (MOEA) eying a seat in the new company's board of directors to show the government's support for renewable energy development.

Chiou Jiunn-rong (邱俊榮), deputy chief of the National Development Council, told CNA that the three companies have asked about a possible investment from the fund in the merged firm, but no formal application has been filed.

For its part, the MOEA praised the three companies in the deal, saying they are all fundamentally sound players in the sector.

The MOEA said if the new company seeks funds from the government or bank loans for expansion, the ministry will try its best to help facilitate its ability to grow and compete with its global rivals.

While trading in the shares of the three companies was suspended pending Monday's announcement, optimism that the merger will boost Taiwan's competitive edge in the world's solar energy sector sparked strong buying in other solar energy stocks on Monday.

Solar wafer maker Gigastorage Corp. (國碩) rose 10 percent, the maximum daily increase, to end at NT$21.45, while solar cell suppliers Green Energy Technology Inc. (綠能) and Motech Industries Inc. (茂迪) also gained 10 percent to end at NT$20.00 and NT$29.95, respectively.

Trading of Neo Solar, Gintech Energy, and Solartech Energy shares will resume Tuesday, according to the Taiwan Stock Exchange.

(By Jackson Chang, Chen Cehng-wei, Liao Yu-yang and Frances Huang)
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