Comtec Solar to repurchase bonds from TPG for $77m

Citing overcapacity and declining average selling prices in the solar cell market, Comtec said in a statement posted to the Hong Kong stock exchange on Wednesday that it would not expand its manufacturing capacity through debt financing and had decided to reduce overall debt levels.

In April 2011, TPG Capital invested up to HK$1.2 billion ($150 million) through the purcahse of convertible bonds and warrants issued by Comtec Solar that would convert into an approximate equity 21% stake in the companyl. This marked the private equity firm's first foray into China's solar-energy segment and the funds were used to expand production capacity.

Comtec said the repurchase deal would allow it to enjoy the benefits of reducing its debt levels with immediate effect and avoid over-leveraging on debt-financing in a tough industry environment.

"The board believes that entry into the repurchase deed and the warrant subscription agreement, and in particular the negotiation of concessions from the investor, is a prudent step to take in view of the difficult industry environment the Group is facing," the company said in the statement.

Shanghai-based Comtec Solar was founded in 1999. It focuses on the design, development, manufacture and marketing of solar wafers. The company's share price has dropped 4.1% to HK$1.36 during morning trading on January 26 after the announcement.

 

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• Topics
• Cleantech
• Greater China
• PIPEs