CDH, Oriza back Canadian Solar carve-out

Third-party investors, including CDH Investments and Oriza Holdings, are putting up RMB1.5 billion and will take a 20% stake in the divested entity. Canadian Solar will own 74.9% and employees will hold the rest. The deal gives the business an equity valuation of RMB7.5 billion.

Canadian Solar wants to list its principal China subsidiary and overseas sales units on Shanghai's Science & Technology Innovation Board - also known as the Star Market - or on ChinNext in Shenzhen, according to a statement. To qualify, the business must be converted into a Sino-foreign joint-stock company. Raising capital from local investors is part of this conversion process.

The assets in question are part of Canadian Solar's module and system solutions (MSS) business. It manufactures products such as solar cells and solar system kits as well as providing power plant construction and management services.

Canadian Solar recorded revenue of $3.2 billion last year, of which about $2.5 billion came from MMS. Solar project development and fee streams from partial ownership of certain projects accounted for the rest. Asia was responsible for 36% of all MSS business in 2019, compared to 34% for the US and 30% for Europe and the rest of the world.

 

Shawn Qu, chairman and CEO of Canadian Solar, said that the fundraising will allow the company to immediately expand its manufacturing capacity. It is targeting product shipments with a capacity of 18-20 gigawatts in 2021.

“Photovoltaics have become the most important growth point in clean energy and an important engine for the global green and low-carbon transformation. Canadian Solar is the world’s leading photovoltaic module and energy solution provider with customers in more than 150 countries," added Yiqiao Ren, a managing director of CDH Investment.

The Star Market has become a popular listing destination in part because it operates under a registration rather than an approval-based system, which speeds up the IPO process. ChiNext adopted the same system in August.

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• Topics
• Greater China
• Exits
• Cleantech
• China
• energy
• CDH Investments Management
• Oriza