Taipei, A newly formed solar energy company, the largest of its kind in Taiwan, said Monday that it has received a fund injection of more than NT$2.7 billion (US$87.38 million) from the government in a private placement.
In a statement, Neo Solar Power Corp. which kept its name temporarily in a recent merger with Gintech Energy Corp. and Solartech Energy Corp., said it has completed a private placement to issue about 334 million new shares at NT$8.32 per share to two government entities.
Through the share placement, the National Development Fund (NDF) and the management committee of the government-controlled Yao Hwa Glass Co. Ltd. have injected a total NT$2.781 billion into the new company.
Neo Solar, which will be renamed United Renewable Energy Co. (UREC) in November, said it will hold an extraordinary shareholders meeting on Nov. 20 to vote to reshuffle its nine-member board and that the NDF and Yao Hwa Glass will each take two seats, including that of an independent director.
In January, the NDF decided to fund the new solar company which was merged on Oct. 1, as part of the government's efforts to develop renewable energy.
The NDF's decision was in line with the government's implementation of a "5 plus 2" innovative industry policy, which includes boosting the renewable energy business.
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 new company has increased by about NT$3.34 billion from NT$21.1 billion.
Before the merger, Neo Solar had said UREC would set its sights on the global market in a bid to reduce the Taiwan solar energy sector's over-dependence on the China market.
The company had forecast that UREC, providing one-stop services ranging from solar cell supply to back-end module production, will post sales of NT$50 billion in its first year of operations 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. and solar cell module supplier Anji Technology Co., remained profitable in the first half of the year, analysts noted.
In the first half of the year, Neo Solar posted NT$1.02 in loss per share, compared with NT$1.83 in loss per share over the same period of last year.
The company has recorded a loss per share of NT$1.71, NT$6.53, and NT$4.08 each year over the period 2015-2017.
Source: Focus Taiwan News Channel