With time ticking down on a potentially crucial €3.5 million fundraising exercise at Finnish solar manufacturer Valoe Corp, the news the company has felt the need to sign up for around 41% of the convertible bonds issued does not bode well.
The 45-day fundraising round, which was launched in November and then had its subscription period extended by three months, is due to expire on Sunday and the Valoe board has thus far committed to buy 16 million of the 38.9 million bonds itself – 5 million on January 8, and 11 million on February 25.
Valoe CEO Iikka Savisalo told pv magazine in December his company’s plans to complete payment for the tortuous acquisition of a high-efficiency cell production line in Lithuania did not hinge solely on the convertible bond issuance but failure of the exercise would certainly appear to represent a significant setback for the company.
Valoe needs to raise money to complete payment for the acquisition of a cell production line in Lithuania from Solitek and its parent company Global BOD in a deal for which payment terms have already been renegotiated five times. At the last time of asking, in December, Valoe was attempting to raise a €1.1 million payment associated with the factory purchase plus the €1.2 million needed to integrate the interdigitated back contact (IBC) production equipment it bought from defunct Italian company Megacell Srl in a fire sale.
A recent short-term loan from Valoe backer Winance Investment now means the Finnish company also has to come up with an additional €500,000, plus unspecified interest, by May 5.
Having agreed a purchase price of €3.5 million for the Lithuanian facility, Valoe handed over €300,000 and agreed to pay the balance by May last year. With Valoe unable to do so, Solitek agreed to sell 70% of its Lithuanian cell manufacturing business to the Finnish buyer in exchange for the €3.2 million owed, with Valoe to pay €2.8 million by the end of September and the balance by the end of September this year. The deadline for the €2.8 million was first extended, to mid October, and then renegotiated again. This time, Global BOD agreed to accept €2 million, plus a €500,000, 8% convertible bond that was due to mature in January. That left Valoe needing to find an additional €1.1 million by the end of November, with Global BOD entitled to convert the bond to make up any shortfall.
Winance credit line
Valoe announced, on December 2, it had been unable to raise the €1.1 million. Since then, according to the company’s stock market filings, main investor Winance has converted €440,000 of the notes it holds in the company – under a financing arrangement secured in 2018 – into shares.
In a nine-month financial update for 2019 published in November, Valoe revealed it had undrawn credit lines of €1 million under the €1.5 million deal signed with Winance. With the investor having already converted €160,000 of its notes since that notice, and Valoe having issued a further €500,000 of notes to the investor, it is not immediately apparent whether that credit line has been exhausted. What is certain, is that Winance on February 6 issued a €500,000 short-term loan to Valoe which is due to expire on May 5.
The results of the €3.5 million convertible bonds issue may be revealing when published, as will the full-year results for 2019 due to be published at the end of the month. In an additional headache for the business, the full-year figures were held up after the independent auditor working on them failed an oversight test.
Solar car deal
Valoe has in the past cited a $12 million (€10.7 million) IBC cell order from an unnamed U.S. customer which was contingent on the Lithuanian factory producing cells and hitting predicted margins. With cell production that was slated for the second half of last year already more than ten weeks overdue – Savisalo told pv magazine in December operations would begin by the end of this month – the business is now touting an automotive deal it has landed.
The front page of the Valoe website trumpets the claim Munich-based solar-powered car manufacturer Sono Motors will use Valoe cells to plaster the bodywork of its Sion self-charging electric car to extend its range by 34km without charging “on a sunny day”. According to Valoe, Sono has more than 10,000 pre-orders for the Sion, 260,000 of which will be manufactured over eight years at the former Saab factory in Trollhättan, Sweden. The Sono Motors website says production will start in 2022.
Valoe’s statement about its adoption as technology partner by the carmaker provides no financial details or production volumes and it will be interesting to see whether news of the arrangement will improve investor sentiment towards a company which still, at present, only operates a 20 MW annual capacity module production line in its homeland.