A newly formed solar energy company, the largest of its kind in Taiwan, on Monday said it has received a fund injection of more than NT$2.7 billion (US$87.32 million) from the government in a private placement.
Neo Solar Power Corp (新日光), which has temporarily kept its name in a merger with Gintech Energy Corp (昱晶能源) and Solartech Energy Corp (昇陽光電), has completed a private placement to issue about 334 million new shares at NT$8.32 per share to two government entities, the company said in a statement.
Through the share placement, the National Development Fund (NDF) and the management committee of the government-controlled Yao Hua Glass Co (耀華玻璃) injected a total of NT$2.781 billion into the new company.
Neo Solar, which is to be renamed United Renewable Energy Co (UREC, 聯合再生能源) next month, said it would hold an extraordinary shareholders meeting on Nov. 20 to vote on reshuffling its nine-member board, on which the NDF and Yao Hwa Glass would each take two seats, as well as an independent director seat.
In January, the NDF decided to fund the solar company, which merged on Oct. 1, as part of the government’s efforts to develop renewable energy.
The NDF’s decision is in line with the government’s implementation of its “five plus two” innovative industry policy, which includes boosting the renewable energy sector.
Under the merger, Neo Solar brought Gintech Energy and Solartech Energy fully under its corporate umbrella through a stock swap.
After the private placement, the paid-in capital of the company increased by about NT$3.34 billion from NT$21.1 billion.
Before the merger, Neo Solar had said that UREC would set its sights on the global market in a bid to reduce the dependence of Taiwan’s solar energy sector on the Chinese market.
The company had forecast that UREC, providing one-stop services ranging from solar cell supply to back-end module production, would post sales of NT$50 billion in its first year of operation and annual revenue of NT$90 billion to NT$100 billion within five years.
However, market analysts have said that amid escalating competition in the global market, solar energy developers in Taiwan remain largely unprofitable and it is not easy for them to make an immediate turnaround.
Only a few companies, such as solar cell material maker Gigasolar Materials Corp (碩禾) and solar cell module supplier Anji Technology Co, remained profitable in the first half of the year, analysts said.
In the first half of the year, Neo Solar posted losses of NT$1.02 per share, compared with losses per share of NT$1.83 over the same period last year.
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