The Chinese solar-wafer company said it would offer additional American depositary share, after raising $400 million in convertible notes in April, to build its planned silicon plants and expand wafer production.
by: Jennifer Kho September 19, 2008
LDK Solar Co. Ltd. (NYSE: LDK) announced Friday it plans to sell $200.4 million in American depositary shares to raise more money for manufacturing.
The Xinyu City, China-based solar-wafer manufacturer said it would offer 4.8 million American depositary shares at $41.75 each. In filings with the U.S. Securities and Exchange Commission, the company didn't disclose how much it expects to net from the sale.
LDK said it plans to use approximately 60 percent of the net proceeds to build a silicon-manufacturing plant, approximately 30 percent to expand its wafer-production capacity and the final 10 percent for "general corporate activities."
The company is constructing two silicon factories – a 1,000-ton plant and a 15,000-ton plant – and in April already raised $400 million to build the plants and support a planned wafer-capacity expansion.
The company, which said it has grown its multicrystalline solar-wafer production capacity from 880 megawatts in June to 1 gigawatt in August, expects to reach an annual capacity of approximately 1.1 gigawatts by the end of the year and 2 gigawatts by the end of next year. LDK also plans to begin producing monocrystaline wafers, which convert sunlight into electricity more efficiently than multicrystalline wafers, in the fourth quarter of this year and to reach about 100 megawatts of annual capacity by the end of 2008 and 200 megawatts by the end of 2009.
At that time, Hakan Telenius, organizer of the LDK Investor Group, said he expected the money would be sufficient for the rest of 2008, and that the company "would only raise more if they were not able to deliver on 2009 numbers."
LDK, which was founded in 2005 and made an initial public offering last year, didn't respond to calls and emails asking why it needs more money to complete its plants or whether it expects a delay.
But in an SEC filing, the company said its estimated total cost to build the polysilicon plant (made up of two factories in the same location) is approximately $1.3 billion.
The company in April said it planned to spend $1.2 billion on its first two silicon plants, along with $600 million to expand its wafer production.
At the time, LDK said it would finance the bulk of the cost through its operations, including expected net profits of $200 million in 2008 and $400 million in 2009, as well as about $1 billion in expected customer deposits for long-term wafer contracts for this year and next year.
The company expected a shortfall of at least $200 million, which investors hoped would be more than satisfied by the $400 million it raised in April.
In July, LDK announced that it had completed the first phase of construction on its smaller silicon plant and was on track to begin production by October. But it still was awaiting more equipment to complete the plant, which it expected to happen at the end of the year.
It also planned to complete the first phase of its larger silicon plant by the end of this year.
In a research note in June, Piper Jaffray analyst Jesse Pichel wrote that he remains "cautious on LDK's ability to ramp its polysilicon plant on time," although he expected the company could achieve 16,000 metric tons of capacity in 2009.
According to an SEC filing Friday, LDK still expects to complete the equipment installation at its 1,000-ton plant and to have it operational by the end of the year.
At its 15,000-ton plant, the company plans to complete equipment installation for an annual capacity of 6,000 metric tons by the end of this year, but said it would not begin production at the plant until 2009. In spite of the installation, LDK only expects 5,000 metric tons of capacity to become operational in the first half of next year, said the filing.
"We do not expect to produce any significant quantities of polysilicon prior to 2009," according to the prospectus.
USB AG and Goldman Sachs LLC are underwriting the latest offering.
Saturday, September 20, 2008
Trina Solar, Gestamp Asetym To Open Spanish PV Plant
September 19, 2008 (FinancialWire) -- Trina Solar Ltd. said it has inaugurated a 26 megawatt photovoltaic plant, consisting of an installation, which uses primarily PV modules manufactured by Trina Solar, in Fuente Alamo, Murcia, in the south-east of Spain. The project has been carried out by Spain-based Gestamp Asetym Solar SA, a provider of solar systems.
Under the deal, Trina Solar supplied twenty megawatts of mono and multicrystalline solar modules of the total 26 MW required for the project as part of the long-term arrangement between both companies. The PV plant consists of three phases, including Fuente Alamo I, of 8MW, Fuente Alamo II, of 8MW and Fuente Alamo III, of 10 MW. The phases are installed on a total of 62 square hectares of rural land.
The 26 MW PV system will produce 44,000 megawatt hours per year, which equals the electric consumption of 13,000 homes and will avoid 15,000 tons of CO2 emissions to the atmosphere.
Under the deal, Trina Solar supplied twenty megawatts of mono and multicrystalline solar modules of the total 26 MW required for the project as part of the long-term arrangement between both companies. The PV plant consists of three phases, including Fuente Alamo I, of 8MW, Fuente Alamo II, of 8MW and Fuente Alamo III, of 10 MW. The phases are installed on a total of 62 square hectares of rural land.
The 26 MW PV system will produce 44,000 megawatt hours per year, which equals the electric consumption of 13,000 homes and will avoid 15,000 tons of CO2 emissions to the atmosphere.
Wednesday, September 17, 2008
Suntech breaks ground on new solar-cell production fab
16 September 2008
Suntech has broken ground on a new solar photovoltaics cell production facility in Yangzhou, Jiangsu province, China. The company says it plans to finish the factory and bring its 300-MW cell production capacity online by the end of 2009, boosting its total manufacturing capacity to 1.4 GW.
The new PV cell fab is close to one of Suntech's strategic silicon-wafer supply partners, Shunda Holdings, which the company says will enable it to realize production and operational synergies that are expected to accelerate Suntech's cost-reduction initiatives and path to grid parity.
"With Suntech's rapidly growing international reputation for quality and excellence in solar manufacturing, we are in a prime position to grow our customer base and market share," said Zhengrong Shi, Suntech's chairman/CEO (shown at left). "The Yangzhou facility will provide Suntech with room to meet our capacity expansion target of 2 GW by year end 2010 and enable us to meet the world's burgeoning demand for solar energy."
In May, Suntech announced a 13-year wafer supply agreement with a subsidiary of Shunda, in which the silicon unit will provide Suntech with specified annual volumes of wafers totaling approximately 7 GW over the course of the deal (2008-2020).
"The colocation with Shunda's polysilicon plant and wafering facilities will enable a virtual integration of the solar value chain, from polysilicon to solar panel, supporting our move to providing cost-effective solar solutions," noted Shi.
Over the past few months, Suntech has inked several multiyear supply deals with various polysilicon and wafer producers, including DC Chemical, GCL Silicon, and PV Crystalox, and has also purchased a minority stake in poly manufacturer Nitol.
Suntech has broken ground on a new solar photovoltaics cell production facility in Yangzhou, Jiangsu province, China. The company says it plans to finish the factory and bring its 300-MW cell production capacity online by the end of 2009, boosting its total manufacturing capacity to 1.4 GW.
The new PV cell fab is close to one of Suntech's strategic silicon-wafer supply partners, Shunda Holdings, which the company says will enable it to realize production and operational synergies that are expected to accelerate Suntech's cost-reduction initiatives and path to grid parity.
"With Suntech's rapidly growing international reputation for quality and excellence in solar manufacturing, we are in a prime position to grow our customer base and market share," said Zhengrong Shi, Suntech's chairman/CEO (shown at left). "The Yangzhou facility will provide Suntech with room to meet our capacity expansion target of 2 GW by year end 2010 and enable us to meet the world's burgeoning demand for solar energy."
In May, Suntech announced a 13-year wafer supply agreement with a subsidiary of Shunda, in which the silicon unit will provide Suntech with specified annual volumes of wafers totaling approximately 7 GW over the course of the deal (2008-2020).
"The colocation with Shunda's polysilicon plant and wafering facilities will enable a virtual integration of the solar value chain, from polysilicon to solar panel, supporting our move to providing cost-effective solar solutions," noted Shi.
Over the past few months, Suntech has inked several multiyear supply deals with various polysilicon and wafer producers, including DC Chemical, GCL Silicon, and PV Crystalox, and has also purchased a minority stake in poly manufacturer Nitol.
Tianwei Commits to Additional $227 Million of Polysilicon From Hoku
POCATELLO, ID and CHENGDU, CHINA, Sep 16, 2008 (MARKET WIRE via COMTEX) -- Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. established to manufacture and sell polysilicon for the solar market, and Tianwei New Energy (Chengdu) Wafer Co., Ltd., a subsidiary of Tianwei New Energy Holdings Co., Ltd. that manufactures silicon wafers, photovoltaic cells, and modules in China, today announced the signing of a second long-term contract for Hoku's sale and delivery of additional quantities of polysilicon to Tianwei over a ten-year period beginning in the second quarter of 2010.
According to the contract, up to approximately $227 million may be payable to Hoku during the ten-year period, subject to product deliveries and other conditions. Together with the first contract, this brings Tianwei's total orders from Hoku to approximately $511 million over ten years. The take-or-pay contract provides for the delivery of predetermined volumes of polysilicon each year, with the first shipment in the second quarter of 2010 and the remainder over a ten-year period at set prices that will decline throughout the term of the agreement. The contract also provides for a deposit of $10 million to Hoku in September 2008, and requires that Tianwei make additional deposits for products in the amount of $12 million by December 15, 2008, $12 million by April 30, 2009, and $2 million upon first shipment. Under the agreement, Hoku will grant to Tianwei a security interest in all of its tangible and intangible assets related to its polysilicon business to secure Hoku's obligation to repay $36 million to Tianwei as a credit against product shipments over time.
"We strive to develop solid relationships with suppliers who we view as long-term strategic partners for our mutual growth and success," said A. Guo, Tianwei's general manager. "Hoku shares this long-term view, and we are pleased to further solidify our relationship by placing this second order."
"Tianwei New Energy demonstrates an entrepreneurial spirit, and is backed by the strength of the Tianwei Group, an established leader in the power transmission equipment market in China," said Dustin Shindo, chief executive officer of Hoku Scientific, Inc. "Tianwei is an ideal long-term partner for Hoku, and we were happy to accept their second order."
With the $36 million in additional prepayments from Tianwei, Hoku has secured an aggregate of $306 million in prepayment commitments from its customers, including Suntech, Solarfun, Kinko Energy, and Wealthy Rise (Solargiga). These prepayment commitments will be paid to Hoku based on the terms of the respective agreements that Hoku has with each of its customers. Hoku previously reported its own cash contribution to the plant as $47 million. Combining the new total of $306 million in customer prepayment commitments with Hoku's cash contribution of $47 million brings the total committed project funding to approximately $353 million.
Shindo commented, "Considering the additional prepayments from our new contract with Tianwei and the anticipated timing of prepayment receipts from our other customers, we believe we have secured sufficient funding to keep the procurement and construction of our polysilicon plant on track through the first quarter of 2009, without the need to raise additional capital from financing in 2008. Nevertheless, we will continue evaluating market conditions to determine the best time to raise additional project funds that will be needed in 2009 through debt and/or equity."
Hoku previously reported that it was evaluating ways to increase the effective capacity of its facility beyond 3,500 metric tons of polysilicon production. Hoku recently finalized and obtained the necessary air permits from the State of Idaho to operate its plant at 4,000 metric tons of capacity.
Regarding capacity, Shindo noted, "This new contract with Tianwei increases Hoku's total allocated production output beyond 3,500 metric tons, but less than the 4,000 metric ton limit, which we have confirmed as the forecasted production output for our polysilicon plant. To enable this increase in our production capacity, we have previously designed our trichlorosilane production plant, vent gas recovery system, and select other infrastructure items to accommodate additional production output beyond 3,500 metric tons per year. We expect that continued progress on project development will help us refine our estimated construction and procurement costs. With improved visibility on forecasted expenses, and with the incremental increase in planned production capacity, we are evaluating any associated increases in total project costs. That said, we believe that the increase in planned production output from 3,500 to 4,000 metric tons per year will not require the purchase of any additional polysilicon reactors, trichlorosilane production equipment, or vent gas recovery equipment."
According to the contract, up to approximately $227 million may be payable to Hoku during the ten-year period, subject to product deliveries and other conditions. Together with the first contract, this brings Tianwei's total orders from Hoku to approximately $511 million over ten years. The take-or-pay contract provides for the delivery of predetermined volumes of polysilicon each year, with the first shipment in the second quarter of 2010 and the remainder over a ten-year period at set prices that will decline throughout the term of the agreement. The contract also provides for a deposit of $10 million to Hoku in September 2008, and requires that Tianwei make additional deposits for products in the amount of $12 million by December 15, 2008, $12 million by April 30, 2009, and $2 million upon first shipment. Under the agreement, Hoku will grant to Tianwei a security interest in all of its tangible and intangible assets related to its polysilicon business to secure Hoku's obligation to repay $36 million to Tianwei as a credit against product shipments over time.
"We strive to develop solid relationships with suppliers who we view as long-term strategic partners for our mutual growth and success," said A. Guo, Tianwei's general manager. "Hoku shares this long-term view, and we are pleased to further solidify our relationship by placing this second order."
"Tianwei New Energy demonstrates an entrepreneurial spirit, and is backed by the strength of the Tianwei Group, an established leader in the power transmission equipment market in China," said Dustin Shindo, chief executive officer of Hoku Scientific, Inc. "Tianwei is an ideal long-term partner for Hoku, and we were happy to accept their second order."
With the $36 million in additional prepayments from Tianwei, Hoku has secured an aggregate of $306 million in prepayment commitments from its customers, including Suntech, Solarfun, Kinko Energy, and Wealthy Rise (Solargiga). These prepayment commitments will be paid to Hoku based on the terms of the respective agreements that Hoku has with each of its customers. Hoku previously reported its own cash contribution to the plant as $47 million. Combining the new total of $306 million in customer prepayment commitments with Hoku's cash contribution of $47 million brings the total committed project funding to approximately $353 million.
Shindo commented, "Considering the additional prepayments from our new contract with Tianwei and the anticipated timing of prepayment receipts from our other customers, we believe we have secured sufficient funding to keep the procurement and construction of our polysilicon plant on track through the first quarter of 2009, without the need to raise additional capital from financing in 2008. Nevertheless, we will continue evaluating market conditions to determine the best time to raise additional project funds that will be needed in 2009 through debt and/or equity."
Hoku previously reported that it was evaluating ways to increase the effective capacity of its facility beyond 3,500 metric tons of polysilicon production. Hoku recently finalized and obtained the necessary air permits from the State of Idaho to operate its plant at 4,000 metric tons of capacity.
Regarding capacity, Shindo noted, "This new contract with Tianwei increases Hoku's total allocated production output beyond 3,500 metric tons, but less than the 4,000 metric ton limit, which we have confirmed as the forecasted production output for our polysilicon plant. To enable this increase in our production capacity, we have previously designed our trichlorosilane production plant, vent gas recovery system, and select other infrastructure items to accommodate additional production output beyond 3,500 metric tons per year. We expect that continued progress on project development will help us refine our estimated construction and procurement costs. With improved visibility on forecasted expenses, and with the incremental increase in planned production capacity, we are evaluating any associated increases in total project costs. That said, we believe that the increase in planned production output from 3,500 to 4,000 metric tons per year will not require the purchase of any additional polysilicon reactors, trichlorosilane production equipment, or vent gas recovery equipment."
Tuesday, September 16, 2008
330KW Solar Power Plant Went Grid on in Ning'xia
The first grid on solar power plant in Ningxia started to run on September 15th.
Ningxia is rich in solar energy, in order to make full use of the solar energy Ningxia is promoting the solar energy industry.
Ningxia Power Group began to build this demonstration solar power plant project in April, and the total investment is about 22,390,000 RMB, and the 330KW power plant will generate 680,000 KW power annually.
Ningxia is rich in solar energy, in order to make full use of the solar energy Ningxia is promoting the solar energy industry.
Ningxia Power Group began to build this demonstration solar power plant project in April, and the total investment is about 22,390,000 RMB, and the 330KW power plant will generate 680,000 KW power annually.
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