The National Development Fund is to invest in a new solar energy company as part of the government’s promotion of “green” energy, sources close to the deal said.
The sources said the fund, which focuses on seed, start-up, restructuring, and merger and acquisition investments to speed up the pace of industrial development in the nation, has decided to take a stake in a new company to be formed by three local solar energy firms — Neo Solar Power Corp (新日光能源), Gintech Energy Corp (昱晶能源) and Solartech Energy Corp (昇陽光電).
The decision was made at a meeting held on Wednesday last week during which the fund studied the possibility of investing in the new solar firm, although the amount to be invested and other details have yet to be determined, the sources said.
In October, Neo Solar Power, Gintech Energy and Solartech Energy announced a merger, which would be the largest deal of its kind in the nation’s solar energy industry if it goes ahead.
The merger would create a company with NT$21.1 billion (US$706.7 million) in capital and is expected to burnish the nation’s competitiveness in the global solar energy market, the three companies said.
Under the agreement, one Gintech Energy share is to be swapped for 1.39 Neo Solar shares, while one Solartech Energy share is to be exchanged for 1.17 Neo Solar shares.
The deal is expected to be completed in the third quarter of the year and the company is to be called United Renewable Energy Co (聯合再生能源).
The new company is trying to solicit government funds at a time when the government is promoting the “five plus two” innovative industries, including renewable energy businesses, Neo Solar chairman Sam Hong (洪傳獻) said.
Before the sources indicated that the National Development Fund had decided to invest in the new company, local media reported that the fund was expected to inject between NT$4.5 billion and NT$5 billion.
The reports also said the Ministry of Economic Affairs is eyeing a seat on the new company’s board of directors to demonstrate the government’s support for renewable energy development.
The sources said the Cabinet set up a NT$100 billion fund through the National Development Fund last year in a bid to help local industries upgrade and the investment would come from that fund.
However, doubts have arisen over the investment as the three companies are all unprofitable.
In the first nine months of last year, Neo Solar, Gintech Energy and Solartech Energy incurred losses per share of NT$3.51, NT$2.20 and NT$2.07 respectively.
The National Development Fund is also the largest single shareholder in Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker.
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