The Chinese integrated PV manufacturer has been told for the second time in less than a year that it has fallen below NYSE listing standards, as its average market capitalization has remained below $50 million for 30 straight trading days, according to an online statement. It now has 90 days to provide the NYSE with a business plan that shows how it plans to deal with its debts and regain compliance with the exchange’s listing standards within an 18-month period. Its American Depositary Shares (ADS) closed down at $2.46 on Friday in New York.
ReneSola has entered into a term sheet with chairman and CEO Xianshou Li to review the potential disposition of its PV production operations, in addition to its LED distribution business. In June, Li submitted a non-binding proposal to the company to potentially acquire its polysilicon, wafer and PV module production businesses and their related debts. After a committee of independent directors discussed the proposal and other potential solutions throughout the summer, the company decided this week to enter into a non-binding term sheet with Li.
The term sheet states that roughly CNY 3.8 billion ($572.9 million) of debt could be wiped off the group’s books by selling off parts of its upstream manufacturing operations. Most or all of the estimated $200 million of trade payables that the company would owe to those business units following such a transaction would be canceled. ReneSola could then potentially issue a specific number of ADS — each representing 10 shares of the company — to Li and his affiliates, subject to further negotiation. However, the company emphasized that the terms it has set out remain tentative for now, as they are still being evaluated.
If ReneSola manages to once again regain compliance with NYSE listing standards, it will still be subject to quarterly monitoring. However, if the NYSE rejects its business plan, its ADS could be suspended from trading and potentially de-listed.
The warning marks the second time in less than a year that ReneSola has fallen below the NYSE’s minimum listing standards. Last November, the market regulator warned the company that it was in danger of being de-listed, as its ADS had fallen below the minimum average closing price of $1.00 per share. It only regained compliance with the exchange’s listing requirements in early March of this year, by trading above the NYSE’s minimum threshold for 30 consecutive days.
Earlier this summer, ReneSola recorded a net loss of $23.2 million for the first quarter. Revenue fell 39.9% year on year to $156.6 million, as it continued to intensify its focus on its downstream project development business. Its downstream pipeline stood at more than 1.4 GW throughout the world by the end of June.