Canada-based solar power and technology producer Canadian Solar has agreed to raise RMB1.78bn ($261m) for the spinoff of its CSI Solar subsidiary, at a valuation of $1.1bn.
Approximately $219m of the capital will be provided by investors including alternative asset management group CDH Investments and SIP Oriza PE Fund Management, part of investment manager Oriza Holdings.
About $4.5m of shares will be bought by Canadian Solar employees at the same $1.1bn valuation, while employees and board members are set to subscribe to approximately $36.4m of shares through an employee stock ownership plan at a 30% discount to the valuation.
Canadian Solar develops solar energy projects and provides power through a portfolio of plants in addition to offering operations and maintenance, and engineering, procurement and construction services.
CSI Solar is Canadian Solar’s modules and systems solutions (MSS) business, taking in solar module, inverter and system kit manufacturing activities. The company will retain a 74.9% stake in the spinoff, which it plans to list in China through an initial public offering in the next two years.
Shawn Qu, Canadian Solar’s chairman and CEO, said: “The successful completion of this fundraising, which we believe fairly values our MSS business, marks an important milestone for Canadian Solar and takes us one step closer towards the planned listing of our MSS business, or CSI Solar, in China.
“It will also give us the capital to immediately expand our manufacturing capacity with the most advanced manufacturing technologies available to support our targeted 18 GW to 20 GW in shipments for 2021.
We believe this strategy will allow us to expand our market share, sustain and enhance our future pricing power and maintain better control over our manufacturing costs.”
