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Yingli acquires Cyber Power Group

Posted: 13 Jan 2009 ?? ?Print Version ?Bookmark and Share

Keywords:acquisition Yingli Cyber Power? agreement purchase? production polysilicon?

Yingli Green Energy Holding Co. Ltd has completed the acquisition of Cyber Power Group Ltd. To fund the acquisition, Yingli used available cash on hand and committed to issue senior secured convertible notes due 2012 (Notes) to Trustbridge Partners II L.P.

Pursuant to a share purchase agreement between Yingli Green Energy and Grand Avenue Group Ltd, a company controlled by Liansheng Miao, chairman and CEO of Yingli, the former company acquired 100 percent of the issued and outstanding share capital of Cyber Power. Cyber Power, through Fine Silicon Co. Ltd (its principal operating subsidiary in China), is a development stage enterprise with plans to begin production of solar-grade polysilicon in the 2H 09.

In accordance with the agreement, Yingli Green Energy paid Grand Avenue approximately $77.6 million, of which $25 million had been paid in November 2008 pursuant to the previously announced binding letter of intent relating to the Cyber Power acquisition. The final acquisition price was determined based on an approximately 4 percent discount to the net tangible book value of Cyber Power as of Nov. 30, 2008. Proceeds from the Cyber Power acquisition will be used by Grand Avenue to repay in full all of its outstanding indebtedness incurred to date in connection with the construction of the polysilicon operations of Fine Silicon.

Stable supply of polysilicon
"We are excited to take this first step in expanding Yingli Green Energy's manufacturing capability to include solar-grade polysilicon," commented Zongwei Li, chief financial officer of Yingli Green Energy. "We believe having a fully integrated business model will not only help us secure high quality polysilicon to meet our customers' demands for top quality PV [photovoltaic] products but also help control our silicon costs and improve our margins."

Yingli Green Energy expects that the Cyber Power acquisition will enable it to have a more secure and stable supply of polysilicon that is less dependent on market conditions, and allow it to further vertically integrate its manufacturing processes and improve margins.

In a concurrent transaction, Grand Avenue purchased from Gold Sight all of Gold Sight's 30 percent equity interest in Cyber Power, enabling Grand Avenue to then sell 100 percent of the issued and outstanding share capital of Cyber Power to Yingli to complete the acquisition. Under the terms of the note purchase agreement, subsequent proceeds received by Gold Sight from the sale of Gold Sight's 30 percent equity interest in Cyber Power will be applied by Trustbridge or its affiliate toward the purchase of up to an additional $30 million of the Notes. Yingli Green Energy expects to use the proceeds from the additional $30 million tranche of the Notes for general corporate purposes.

The Cyber Power acquisition received final approval from Yingli's board of directors and audit committee according to its corporate governance requirements.

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