Mar 16 2010
China Sunergy Co., Ltd. ("China Sunergy") (Nasdaq: CSUN), a specialized solar cell manufacturer based in Nanjing, China, announced today an agreement to acquire 100% of the shares of two related module manufacturers, CEEG (Shanghai) Solar Science & Technology Co., Ltd and CEEG (Nan Jing) New Energy Co., Ltd.
"These acquisitions enhance China Sunergy's position in the downstream photovoltaic market and advance our initiative of developing into a comprehensive solution provider and providing value-added services to customers," commented Mr. Lu Tingxiu, Chairman of China Sunergy. "We look forward to realizing these strategies by bringing polycrystalline module manufacturing in-house and strengthening our competitive advantages within the solar sector."
Chairman Lu further explained: "Being vertically integrated will help to stabilize and increase margins in a possibly volatile environment, while representing a transformation towards a solution provider. We are reshaping the company from a single dimension manufacturing-oriented business into a platform with two pillars: technological innovation and a closer distribution channel to end customers. This acquisition will also positively impact China Sunergy's customer composition, as we can further focus on providing value-added services to system installers and integrators."
China Sunergy has a strong balance sheet and will be fully capable of funding the acquisitions, which have a total consideration of approximately US$47 million. The consideration is payable by China Sunergy to China Electric Equipment Group and Sundex Holdings Limited in a series of installments. The transactions have been reviewed and approved by all three companies' Boards of Directors.
CEEG (Shanghai) Solar Science & Technology and CEEG (NanJing) New Energy integrate the R&D, production, sales and servicing of solar modules, with total annual production capacities of 150 MW and 70 MW, respectively, with capacity forecasted to be 300 MW and 170 MW by the middle of the year. Both companies were controlled by China Electric Equipment Group Co., Ltd., a company controlled by Mr. Tingxiu Lu, China Sunergy's chairman. These companies have a strong sales network within the United States, Germany, Spain, Italy, the Czech Republic and Southeast Asia.