Go Scale agrees EV battery partnership with SPI Energy

SPI will issue $500 million in five-year convertible bonds with the proceeds earmarked for capacity expansion and M&A in the EV battery space. Go Scale has agreed to act as advisor to the bondholders, whose identities have not been specified. As part of the transaction, SPI plans to enter into a strategic cooperation agreement with Boston-Power, a developer of lithium-ion cell and battery technologies.

GSR led a $125 million funding round for Boston-Power in 2011, which saw the US-based company relocate its operational headquarters to China. The capital was used to bolster manufacturing, R&D and business development activities in the country, including the construction of an EV battery engineering facility.

"We look forward to forming a partnership with Boston-Power and exploring win-win opportunities in the energy storage and EV markets. Working together, SPI Energy and Boston-Power will create a powerful clean energy chain for the transportation industry in China, spanning power generation, power storage, EV rentals and financial services," Xiaofeng Peng, chairman and CEO of SPI, said in a statement.

Go Scale is sponsored by GSR and Oak Investment Partners, drawing on capital commitments from LPs in the two GPs' existing funds as well as from co-investors such as Asia Pacific Resources Development Investment, a vehicle controlled by Hong Kong real estate and renewables investor Kin Ming Cheng. It is looking to create consolidate technology assets across several verticals with a view to creating companies that leverage Chinese demand but are competitive globally.

LEDs are another area of focus, with Go Scale last year agreeing to acquire a majority interest in Lumileds, the LED components and automotive lighting unit of Philips, at an enterprise valuation of $3.3 billion. The deal failed to go through after the Committee on Foreign Investment in the US raised concerns, but Sonny Wu, Go Scale's chairman, said he was still committed to international acquisitions in the space, as well as in electric vehicles and clean energy.

In April, Go Scale and its affiliate, GSR Capital, announced a final close on a $1 billion fund to invest in LED companies globally. This followed the launch of a global M&A fund that Wu said had sufficient commitments to invest $5 billion - including debt financing and co-investment as well as fund equity - across a handful of large-scale deals in areas ranging from clean energy to internet finance.

SPI provides photovoltaic (PV) solutions for business, residential, government and utility customers, with projects in China, Japan, Europe and North America. It also operates online platforms that facilitate the sale of PV products to upstream and downstream suppliers and allow individuals and institutions to make PV-related investments.

The company generated sales of $190 million in 2015, up from $91.6 million the previous year. Net losses widened from $5.2 million to $185.1 million.

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• Topics
• Greater China
• Cleantech
• Technology
• Expansion
• PIPEs
• GSR Ventures
• China
• Growth capital