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Solar cell makers Neo Solar Power (NSP), Gintech Energy and Solartech Energy have jointly announed the siging of a letter of intent for consolidating themselves into a new company, United Renewable Energy (URE).
They said the consolidation will be conducted on an equal footing between the three companies although NSP will be the surviving company for the timing being before being renamed as URE shortly after the set date for the consolidation. NSP chairman and CEO Sam Hong will act as URE chairman and Gintech president Pan Wen-whe as CEO.
For the consolidation, there will be a tentative stock swap scheme: one Gintech share in exchange of 1.39 NSP shares and one Solartech share in exchange of 1.17 NSP shares.
As the letter of intent is not legally binding, each of the three companies will have its board of directors vote respectively on the proposal by late December 2017 and then the three companies will sign a formal agreement, looking to complete the merger in third-quarter 2018.
The three companies and fellow maker Tainergy Tech originally planned to form an alliance to consolidate their solar cell production resources, but Tainergy later withdrew and the other three decided to merger into a new company, according to industry sources.
URE will expand paid-in capital by over NT$4.5 billion (US$149 million) and the Taiwan government will substantially support the consolidation with investments from the National Development Foundation and a few state-run enterprises, the sources noted.
NSP, Gintech and Solartech have set up solar cell production lines in Vietnam, Thailand and Malaysia respectively and this coincides with the Taiwan government’s New Southbound Policy to enhance economic relations with Southeast Asia and South Asia countries, the sources analyzed.
Each of the three companies runs PV module production and has invested in PV power stations in Taiwan and abroad. Gintech has also set up a joint venture making solar poly-Si wafers. Their merger will produce a vertically integrated PV firm, the sources said.
The government support may attract other Taiwan-based solar cell makers to join URE later, the sources indicated.
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