Solargiga’s Taiwan shares to be de-listed
Oct 2, 2019 11:57 PM ET
- The ever worsening balance sheet of the Hong Kong-based solar manufacturer has triggered the removal of shares listed in Taiwan, which is likely to leave the company with a $2.84 million bill for buying them back.
That oft-mooted turnaround in Chinese solar demand – which was expected to start last month, lest we forget – cannot come soon enough for embattled PV manufacturer Solargiga.
With the Hong Kong listed company pinning its hopes on its domestic market after posting RMB177 million ($24.8 million) losses for the first half of the year, the company has now been landed with a potential $2.84 million liability.
The bill relates to the ever gloomier state of Solargiga’s balance sheet. The fact the group’s net assets now amount to less than a third of its issued share capital has triggered a de-listing of the 3.65% of the company stock traded on the Taiwan Stock Exchange.
Taiwan Depositary Receipts (TDRs) listed on the island nation’s exchange via Mega International Commercial Bank Co Ltd since December 2009 will be removed on November 12 – and unless investors choose to convert them into ordinary Solargiga shares or try and trade them for a limited period, the parent company will be liable to repurchase them.
The method dictated by the Taiwan exchange for calculating the repurchase price Solargiga would have to pay offers TDR holders a 90% premium on the recent trading price, rendering it highly likely the company will have to buy back all the 117 million or so shares for NT$0.753 each (US$0.024), for a total bill of NT$88.3 million.
An update by Solargiga to the Hong Kong exchange today confirmed the company would foot any bill from its balances.
GCL System chief executive Eric Luo recently told Reuters he expects to see only 20-25 GW of new solar in China each year through 2025, although he added rising overseas demand would prevent any overcapacity in the global market.