China’s Sky Solar raises $44.2m in scaled back US IPO

The company sold 5.52 million American Depository Shares (ADS) at $8 apiece, according to a regulatory filing. It originally planned to offload 12.5 million shares at $10-12 apiece. This downsizing came in response to market volatility that has prompted numerous other companies to delay listing plans. BVCF-backed Jaguar Animal Health is among those yet to announce pricing terms.

IDG-Accel China Capital, a China-focused VC fund managed by IDG Capital Partners, acquired 2.5 million additional shares through the offering and now has a 26.6% stake in the business, up from 24.2%. The fund did not intend to add to its holding; the original filing indicated the fund would be diluted to 18.7%.

Weili Su, the company's founder and executive chairman, remains the largest single shareholder with 27.9%, having seen his interest diluted from 31.6%.

Sky Solar originated in 2007 when Su, who had already set up several solar companies in China, began making investments in Europe. He developed renewable energy power parks in Germany, the Czech Republic and Spain, and then in 2009 expanded into Japan, Canada and the US.

IDG-Accel China Capital, a China-focused VC fund managed by IDG Capital Partners, invested $5 million in Sky Solar through convertible promissory notes in 2012. The following year it committed a further $5.9 million as part of a funding round worth $21 million.

Until 2013, the majority of Sky Solar's business involved building and selling commercially operational solar parks. It then switched to the IPP model, becoming an owner and operator of solar parks and generating revenue from selling electricity, rather than the parks themselves. The company wanted to retain more value from project development and generate stable long-term cash flow.

Since inception, Sky Solar has developed 198 solar parks with an aggregate capacity of 181 megawatts. Under the IPP mode, it currently operates parks with a combined capacity of 53.9 MW, including 23 MW in Greece, 18.7 MW in Japan, 5.6 MW in the Czech Republic, 3.7 MW in Bulgaria, 2 MW in Canada and 0.9 MW in Spain. A further 1.3 gigawatts of projects are under development.

Becoming an IPP has had a significant impact on Sky Solar's bottom line. The company swung from a profit of $27.9 million in 2012 to a loss of $54.2 million in 2013. Revenue fell from $133.5 million to $5.6 million over the same period. Revenue from selling electricity grew from $4.5 million in 2012 to $8 million last year - or 2.2% of total revenue to 22%.

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• Topics
• Cleantech
• Greater China
• Exits
• Investments
• IDG Capital Partners
• China
• IPO
• Cleantech
• Exit
• PIPE
• Accel Partners