Jan 10 2011
LDK Solar, which produces multicrystalline solar wafers, announced that it has signed a definite agreement, along with its subsidiaries, with investors for subscription of $240 million of preferred shares in LDK Silicon & Chemical Technology.
The investors are China Development Bank Capital Corporation, investment funds associated with China Construction Bank Corporation, Excel Rise Holdings and Prosper East, and another investment fund, which is associated with a Chinese bank.
As per the agreement, the investors will subscribe to series A redeemable shares and will hold and operate the polysilicon business of LDK Solar. The preferred shares represent about 18.46% of the total share capital of LDK Silicon & Chemical Technology. The shares can be converted into ordinary shares at an initial ratio of 1:1. Under the agreement, the investors can redeem a price equivalent to full subscription price and 23% of annual internal rate of return.
The deal provides veto rights to the investors to access information on polysilicon business and few registration rights. To restructure its polysilicon business, LDK Solar has purchased 15% stake in its polysilicon plant, which has 15,000 metric ton capacity, from Jiangxi International Trust and Investment.