Hong Kong, China, 31 October 2014 - United Photovoltaics Group Limited (“United PV” or the “Company”, stock code: 00686.HK, whose largest shareholder is China Merchants New Energy Group “CMNE”), a leading solar power plant investor and operator in China, is pleased to announce today that the Company will jointly acquire, with Shenzhen China Merchants Yinke Investment Management Limited (“CM Yinke”) (or the funds it manages, similarly hereinafter) under China Merchants Capital Investment Co., Ltd (“CM Capital”), the entire equity interest of Changzhou Guangyu New Energy Company Limited (the “Target Company”) from China Merchants Zhangzhou Development Zone Trenda Solar Limited. The Target Company owns four on-grid solar power plants with a total installed capacity of approximately 80MW in Hami City and Turpan City of Xinjiang Province, PRC. In addition, the Company will issue convertible bonds in the principal amount of HK$529.2 million (equivalent to approximately RMB420 million) to China Merchants Wealth Asset Management Limited (“CM Wealth”) under China Merchants Bank Co., Ltd (“CMB”). The proceeds from which will be used to pay for the acquisition of the equity interest in the Target Company and the capital expenses and operational cost of the solar power plants.
Pursuant to the cooperation agreement, the Company will acquire 51% equity interest in the Target Company, and CM Yinke will acquire the remaining 49%. In addition, after the entering into of the equity transfer agreements in relation to the joint acquisition of the Target Company and, subject to the fulfillment of certain conditions precedent, the Company will issue convertible bonds to CM Wealth. With the principal amount of approximately HK$529.2 million, the convertible bonds have an interest rate of 7.5% per annum, an issue price of 100% of the principal amount and an initial conversion price of HK$1.03. Moreover, in the period commencing from the end of six months after the completion date and ending on the third anniversary of the completion date, CM Yinke is entitled to request the Company to acquire part or all of the 49% equity interest in the Target Company owned by it. The Company will settle the consideration by issuing shares to CM Yinke. If the average closing price of the shares for 15 consecutive trading days in the Stock Exchange reaches HK$1.7 per share, the Company is entitled to acquire all of the 49% Equity Interest from CM Yinke.
The joint acquisition is a new cooperation model with the banking capital and investment fund under China Merchants Group, following the previous successful cooperation with Huabei Expressway Co., Ltd, another sister company under China Merchants Group, to jointly acquire the solar power plant in Feng County, Jiangsu Province. This acquisition extends the Company’s foothold to a new territory in Xinjiang. As the major shareholder of CM Wealth, CMB started to loosen the loan policy for the solar power plants industry for its promising growth and prospects, and classified it as a moderate investment industry, according to their internal report of Photovoltaic Industry Lending Guidance. This report is of strong backup for the implementation of national supportive policies to the solar farm industry. In the future, the Company will further strengthen the cooperation with the investment funds, CMB and other subsidiaries under China Merchants Group, and local and overseas industry funds, facilitate United PV to become the most competitive solar power plants operator in China and the most valuable platform for the investors in the capital market. In the meantime, with long-term and stable earnings and cash flows from the solar power plants, the Company believes more and more financial institutions and insurance companies will join hands together to support the development of solar power plants business, promote the clean energy and improve the environmental situation in China.