Trina to go private in $1.1 billion deal

Share

Trina Solar is set to become the largest Chinese PV manufacturer to go private. Under a deal announced today, Trina shareholders are set to receive 23 cents per share, a premium of 20.2% on average share value over the previous 90 days, and 40.6% on the American depositary share closing price on July 29. ADS holders will receive $11.60 per share.

The "going private" proposal was first disclosed on December 11.

Ash Sharma, the senior director of IHS Markit's solar and energy storage research division, said the move is likely a result of the emerging module oversupply market.

"There are quite a few reasons [for the move]," said Sharma. "Part of it is depressed share values, but another reason is that the companies would have greater freedom when private than being responsible to public shareholders."

"With oversupply coming this year, or even underway now, companies are under pressure from shareholders to protect margins. But most of these module companies are going to have to significantly cut prices, and margins will be extremely thin if not negative, in order to maintain volume and market share," said Sharma."

The IHS analyst notes that other Chinese companies are likely to follow suit.

While as a private company Trina will have more freedom to price more aggresively, the move may bring with it additional challenges.

"It allows Trina to be a bit more long-term in its approach, rather than focus on quarter to quarter margins and be more strategic rather than having to answer to shareholders," said Sharma. "But as a private company how is it going to continue to raise capital? It is not going to have as easy access [to captial] in the future."

In a statement from Trina, the investor consortium partners are listed as Jifan Gao himself, Shanghai Xingsheng Equity Investment & Management Co., Ltd., Shanghai Xingjing Investment Management Co., Ltd., Great Zhongou Asset Management (Shanghai) Co., Ltd., Liuan Xinshi Asset Management Co. and affiliate companies.

Trina's company board unanimously approved the move. It requires a two-third vote at a shareholder meeting to go ahead. Trina expects to finalize the transaction and formally delist from the New York Stock Exchange in Q1 2017.

Popular content

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.

Share

Related content

Elsewhere on pv magazine...

Leave a Reply

Please be mindful of our community standards.

Your email address will not be published. Required fields are marked *

By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.

Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.

You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.

Further information on data privacy can be found in our Data Protection Policy.