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ReneSola buys Dynamic Green Energy

Posted: 28 Sep 2009 ?? ?Print Version ?Bookmark and Share

Keywords:solar? Dynamic Green acquisition? photovoltaic?

China's ReneSola Ltd has signed a share purchase agreement for Dynamic Green Energy Ltd. The agreement states that ReneSola will acquire 100 percent of the shares in Dynamic Green for 26,787,210 newly issued ReneSola ordinary shares and $10 million in the form of a convertible promissory note issued by ReneSola.

Dynamic Green, through its wholly-owned subsidiary Jiawei Solarchina Co. Ltd and other Chinese operating subsidiaries, manufactures solar products ranging from ingots to photovoltaic (PV) modules and provides OEM services for leading solar manufacturers. Dynamic Green provides customers with high quality products and processing services, using raw materials sourced or produced by Dynamic Green or supplied by customers. It owns and operates several manufacturing facilities in different cities in China, including ingot and wafer manufacturing facilities in Sanhe, Hebei province, an upgraded metallurgical grade silicon manufacturing facility in Guiyang, Guizhou province, module and cell manufacturing facilities in Wuhan, Hubei province, and OEM facilities in Shenzhen, Guangdong province.

Dynamic Green provides a substantial amount of sales and OEM services, particularly sales and services to its major customers such as Evergreen Solar, Inc. and SunPower Corp., under multi-year, long-term contracts. The long-term contracts for OEM services require Dynamic Green to provide a range of processing services, including processing of ingots and solar wafers as well as PV cells and modules. Dynamic Green intends to continue to perform under these contracts after the acquisition.

"ReneSola's acquisition of Dynamic Green will significantly increase our OEM capabilities and will accelerate the implementation of our strategy to become a fully-integrated solar company," said Xianshou Li, CEO of ReneSola. "The acquisition will enhance our competitiveness by enhancing our product quality, provide cost synergies and expand our strategic relationships with global key industry players. We believe the strategic benefits of uniting two highly complementary companies will create additional shareholder value through earnings accretion and access to new growth opportunities."

"Dynamic Green is excited to join forces with ReneSola," said Kongxian Ding, chairman and CEO, Dynamic Green. "The synergies created by the two businesses will allow us to better serve and expand our existing global customer base and provide immediate opportunities to leverage efficiencies and drive innovation for future growth."

Acquisition details
The acquisition and the share purchase agreement have been approved by both companies' boards of directors. At closing, ReneSola will enter into a shareholders' agreement, a registration rights agreement and lock-up agreements with certain Dynamic Green selling shareholders and amendments to employment agreements and non-compete agreements with Dynamic Green's senior management. Under the shareholders agreement, Kongxian Ding will have the right to appoint two members to ReneSola's board of directors, one of whom must be an independent director.

Kongxian Ding, the founder and the largest shareholder of Dynamic Green, will be subject to a three-year lock-up and Dynamic Green's other management shareholders and certain non-management shareholders will be subject to one-year lock-ups starting from the closing date, subject to certain exceptions (including the ability of certain shareholders to sell limited amounts of shares commencing on the date that is 181 days following the closing date). Other non-management shareholders will be subject to a three-month or six-month lock-up starting from the closing date, subject to certain exceptions (including, in the case of the six-month lockup, the ability of certain shareholders to sell limited amounts of shares commencing on the date that is 91 days following the closing date). The holder of the $10 million convertible promissory note will not be permitted to sell or convert its note for approximately 11 months following the issuance date, subject to certain exceptions.

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