Revenue slid 39.4% year on year in the April-June period to $151.6 million. The company said that it generated about $3.1 million of its total revenue for the quarter from the sale of 3 MW of rooftop solar capacity in China.
However, the Chinese integrated PV manufacturer — which is now trying to turn itself into a pure-play downstream PV project developer — insisted that its unaudited financial results for the second quarter should not be seen as an accurate indication of its financial health, as the bulk of its revenue and losses relate to operations that it plans to sell off.
Earlier this week, the company revealed plans to sell 100% of its solar manufacturing and LED distribution businesses to its chief executive, Xianshou Li, as part of its ongoing restructuring efforts. The share purchase and subscription deal will shift CNY 3 billion ($452.2 million) in debt to Li, mainly via the group’s ReneSola Singapore unit. The transaction will therefore move the company’s most indebted operations off its books, shaving its immediate liabilities and other short-term debts down to roughly $217.3 million.
“This transaction completes the strategic transformation that was initiated in 2015,” Li said, noting that the company’s PV module production business has complicated its growing focus on downstream project development. “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.”
The company’s total assets will shrink to about $250 million after Li purchases all of the company’s share capital, from $1,154.9 million. Total liabilities will fall from $1,140.2 million to $169.5 million.
ReneSola is also trying to aggressively slim down its operations because it was told in late August that it had once again fallen below the listing standards of the New York Stock Exchange (NYSE). It was given 90 days from the time the delisting warning was issued to regain compliance with NYSE regulations. In response to the NYSE notice, it said that it would consider selling off its indebted polysilicon, wafer and PV production units to retain its listing on the exchange.
In the second quarter of this year, ReneSola reached a deal to sell a 6.75 MW solar project in the U.S. state of North Carolina. It expects to record that sale as revenue in its earnings results for the third quarter. Since the end of June, it has also agreed to sell a 24 MW portfolio of projects in North Carolina, as well as 10 MW of ground-mount PV in the U.K.
The company’s cumulative installed PV capacity stood at 131.2 MW at the end of June. Most of those distributed-generation solar projects are located in eastern and central China, with the exception of 15.4 MW it operates in Romania. It said that it is particularly interested in building more rooftop PV projects in China and expects its installed capacity in the country to reach 150 MW by the end of this year.
It now has roughly 480 MW of solar in late-stage development. Its shovel-ready projects include 151.8 MW in the U.S., 133 MW in Turkey and 104.5 MW in China. It is currently building projects in nine countries throughout the world, with more than 1 GW of capacity in varying stages of development as of early September.
Thus far, the company’s downstream unit has primarily focused on a build-transfer approach. However, in the future it plans to hold onto more of its completed PV projects to become a full-fledged independent power producer (IPP) in certain markets. “The IPP model is especially attractive,” it said in an online statement. “Over time, the company intends to shift a meaningful amount of its revenue to recurring power sales.”
In the third quarter, ReneSola expects its downstream business to generate up to $45 million of revenue. It aims to complete up to 30 MW of projects in the July-September period.