ReneSola Ltd ("ReneSola" or the "Company") (www.renesola.com) (NYSE: SOL), a leading fully-integrated solar project developer and provider of energy efficient products, provides a business update and announces its unaudited second quarter 2017 results.
As announced on September 25, the Company has entered into a definitive share repurchase and subscription agreement (the "SPA") with Mr. Xianshou Li, the Company's Chairman and Chief Executive Officer (the "Buyer") for the sale of the Company's manufacturing (including polysilicon, solar wafer, solar cell and solar module manufacturing) and LED distribution businesses (the "Acquired Businesses"). The transaction will also transfer substantially all of ReneSola's related indebtedness to Li. The transaction will result in:
i) The Company will no longer be liable for the bank borrowings in excess of RMB 3 billion, and the Buyer and his spouse will continue to provide personal guarantees for a majority of such bank's borrowings;
ii) The acquired businesses will cancel approximately $217.3 million of intercompany payables owed to it by the Company; and
iii) The Company will issue 180 million ordinary shares to ReneSola Singapore Pte. Ltd., an entity to be fully owned by the Buyer upon completion.
Mr. Li commented, "This transaction completes the strategic transformation that was initiated in 2015. We will exit the manufacturing business, which has been impaired by overcapacity, pricing pressure and low profitability, and will become a pure play in the rapidly growing and profitable project development market. We believe this is the best path forward for ReneSola. The losses and a weakened balance sheet of the manufacturing business have been significant constraints on the growth of our downstream business. I am very excited to see ReneSola start anew with a stronger balance sheet, a highly capable team and significant growth opportunities. This transaction represents the beginning of a new chapter for ReneSola."
This transaction will significantly improve the Company's balance sheet, providing the financial flexibility necessary to drive the growth of the Company's project development business. The table below summarizes the pro forma changes in the Company's balance sheet, based on the terms of the transaction when it is completed.
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