IDG, Accel back take-private of Hong Kong's Sky Solar

The bidding consortium, which holds a combined 72% interest in the company, has offered $6.00 per share for the remaining 28%, according to a filing. Sky Solar stock jumped 29% following the announcement and closed on May 26 at $4.26, giving the company a market capitalization of around $1.8 billion.

IDG and Accel are existing investors in the company via their IDG-Accel China Capital joint venture, which currently holds a 24.3% stake. Additional participants include Japan NK Investment, which has 36.3%, alongside Jolmo Solar Capital, CES Holding, Sino-Century HX Investments, all of which have holdings smaller than 2%.

The consortium does not include US cleantech private equity firm Hudson Sustainable Investments, an existing backer that agreed to pay $25.5 million in November for shares held by IDG-Accel in a deal that would have given it a controlling position. Hudson and Sky Solar had recently settled a legal dispute around a note purchase agreement that resulted in the private equity firm acquiring a number of Sky Solar projects.

The dispute with Hudson extended a period of legal difficulties for Sky Solar in recent years. In 2017, an independent committee found that a former CEO had transferred funds from the company to personally controlled accounts without authorization. Last year, the company replaced its CFO without explanation.

Sky Solar has an extensive footprint of downstream solar assets across Japan, Canada, and Europe that follows a technology-agnostic approach meant to improve adaptability to market-specific challenges around geography and regulation. The company owns and operates solar parks with 135 megawatts of capacity. More than 500MW in pipeline projects are planned for Japan, Canada, and a number of Latin American markets.

Income is generated primarily from selling electricity to power grids, although some revenue is also derived from selling permits and providing operational services. Revenue fell 24% during 2019 to about $49 million, with the biggest declines by jurisdiction occurring in Japan and Uruguay, where various projects were taken over by Hudson. The loss widened from $22 million to $42 million during the year.

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• Topics
• Greater China
• Industrials
• Cleantech
• Infrastructure
• Buyouts
• Hong Kong (China)
• IDG Capital Partners
• Accel Partners
• energy