Canadian Solar has agreed to a RMB 1.78 billion (approximately $260 million) capital raising for its Module and System Solutions (MSS) subsidiary, CSI Solar.
This capital raising is an important step for CSI Solar to qualify for the planned carve-out IPO in China, and brings in leading institutional investors and strategic partners, including CDH Investment Management Company and SIP Oriza PE Fund Management, among others.
The Third-Party Investors have agreed to purchase existing CSI Solar shares from the company for an aggregate of RMB 1.50 billion ($219 million) at an equity valuation of RMB 7.50 billion ($1.1 billion).
At the same time, a number of Canadian Solar employees will also purchase existing CSI Solar shares from the company for an aggregate of RMB 31 million ($4.5 million) at the same valuation.
In addition, eligible CSI Solar employees and board members have collectively agreed to subscribe to newly issued CSI Solar shares via platforms set up in accordance with CSI Solar’s employee stock ownership plan for an aggregate of RMB 248 million ($36 million) at a valuation discount of 30%, or RMB 5.25 billion ($768 million).
Immediately after closing, Canadian Solar, the Third-Party Investors, CSIQ Employees and ESOP platforms will respectively own 74.9%, 20.0%, 0.4% and 4.7% of CSI Solar.
“The successful completion of this fundraising, which we believe fairly values our MSS business, marks an important milestone for Canadian Solar and takes us one step closer towards the planned listing of our MSS business, or CSI Solar, in China. It will also give us the capital to immediately expand our manufacturing capacity with the most advanced manufacturing technologies available to support our targeted 18GW to 20GW in shipments for 2021. We believe this strategy will allow us to expand our market share, sustain and enhance our future pricing power and maintain better control over our manufacturing costs. We are thankful for the strong support from our new investors and partners and look forward to continuing to create sustainable value for our shareholders.”Dr. Shawn Qu, chairman and CEO of the company.
Following the closing of this transaction, Canadian Solar will actively prepare for the planned listing pursuant to relevant laws and regulations in China.