The proposed merger of Hanwha SolarOne Company and Hanwha Q CELLS Investment Company is continuing to move forward. Hanwha Solarone has finished filing a shareholder circular — dated to December 24, 2014 — with the Securities and Exchange Commission in relation to its previously announced public statement of a definitive share purchase agreement to acquire Q CELLS in an all-stock transaction.
That filing features important information, such as: shareholder voting instructions, financial information for the combined entity, detailed financial and operating information about Hanwha QCELLS, and an outline of the strategic benefits of the deal.
Hanwha Solarone has made it clear that all holders of Hanwha SolarOne’s ADSs and ordinary shares should go over all of the information carefully, and take note of the potential risks — described in the section titled “Risk Factors.”
The filing also features some interesting information with regard to “Q CELLS’ strengthening operational and financial performance.” On that regard, the company saw revenue growth of 177% over the half-year that ended June 30, 2014, as compared to the previous year. As well as the revenue growth, the operating profit rose to $7.8 million for the half-year ending on June 30, 2014, as compared to a loss of $33.2 million for the prior year.
The filing also goes over the potential financial benefits of the merger. According to the company, they are as follows: combined revenue is expected to more than double (to $733 million); gross margin expansion is expected to climb to 14.5% (as opposed to 11.7% for Hanwha SolarOne alone); working/operating capital/cash-flow will be significantly improved; a reduced debt-to-equity ratio of 232% is expected (as opposed to 377% for Hanwha SolarOne alone); and a 129% increase in shareholders’ equity is expected, climbing to ~$674.3 million.
The chairman and chief executive officer of Hanwha SolarOne, Mr Seong Woo Nam, commented on the deal thusly: “We believe that this combination creates a formidable global leader with strong combined financial performance that is well-positioned for long-term growth. The combined company will have a significant presence in the world’s most important solar markets and we look forward to executing our strategy to drive long-term shareholder value.”
It’s hard to argue with him. If successful, the merger will result in what seems inevitable to be a dominant player in the global market. Potential issues are there, though — we’ll have to wait to see if these manifest.
As highlighted in the title, though, one of the biggest statements Hanwha SolarOne made is that it says it can bring 600 MW of tariff-free solar PV modules to the US in 2015, and well over 1 GW in 2016.
Image Credit: Hanwha Solarone
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