JinkoSolar & Canadian Solar Subsidiaries Apply to Get Listed on SSE

Major solar module manufacturing firms JinkoSolar Holding Co., Ltd. and Canadian Solar Inc. announced yesterday the submission of application documents for a potential initial public offering and listing on the Shanghai Stock Exchange‘s Sci-Tech innovation board (the STAR Market), a stock exchange intended to support innovative companies in China, by their subsidiaries.

Both the companies revealed their intentions last year, with Canadian Solar announcing its plan regarding its CSI Solar subsidiary, formerly mainly the Module and System Solutions and the China Energy business, in July and JinkoSolar announcing the same plans with respect to Jiangxi Jinko, its principal operating subsidiary, in September.

These announcements come at a time when many big RE firms are looking to become public companies to gain an easier and faster access to capital, which would give them a financial edge over smaller competitors. For instance, in February this year, Gurugram-based ReNew Power announced that it would go public through its merger with a SPAC called RMG Acquisition Corporation II. The merged company will be called ReNew Energy Global PLC and listed on NASDAQ, a New York City-based American stock exchange.

According to Jiangxi Jinko’s relevant IPO documents, it plans to issue no more than 2,666,666,666 shares, assuming that the over-allotment option is not exercised. The Offering Shares will represent 10% to 25% of the total share capital of Jiangxi Jinko upon completion of this offering. Currently, JinkoSolar owns approximately 73.28% of Jiangxi Jinko’s shares. Following this initial public offering, JinkoSolar would hold approximately 54.96% of Jiangxi Jinko’s shares (calculated assuming 2,666,666,666 shares will be issued in this offering).

The proceeds of the offering, which are subject to the actual size and pricing of the offering, will be used for capital expenditures for the following two projects and additional working capital for Jiangxi Jinko:

• Construction of the Company’s production lines in Haining for 7.5 GW high efficiency solar cells and 5 GW high efficiency solar modules. The total capital expenditure for this project is expected to be approximately RMB5.6 billion and Jiangxi Jinko plans to allocate approximately RMB4.0 billion for this project from the proceeds of the offering.
• Construction of the Company’s research and development center in Haining. The total capital expenditure for this project is expected to be approximately RMB749.8 million and Jiangxi Jinko plans to allocate approximately RMB500.0 million for this project from the proceeds of the offering.
• Additional working capital of approximately RMB1.5 billion.

According to CSI Solar’s relevant IPO documents, it plans to issue up to 541,058,824 shares, excluding shares issuable upon the exercise of an over-allotment option, which will account for no less than 15% of its total share capital after the IPO. Currently, Canadian Solar owns approximately 80% of CSI Solar’s shares, which includes approximately 5% of shares issued under CSI Solar’s employee stock ownership plan that will become effective immediately upon the completion of the IPO. Immediately following the IPO and by giving effect to the ownership transfer of the ESOP shares and the dilution effect from the shares newly issued for the IPO, the company expects to hold approximately 64% of CSI Solar’s shares.

The proceeds of the offering, which are subject to the actual size and pricing of the offering, will be used to strengthen CSI Solar and the company’s market leadership position by investing in capacity expansion across the solar value chain, research and development, and additional working capital for CSI Solar.

The completion of the proposed initial public offering of Jiangxi Jinko and CSI Solar is subject to the review process by the Shanghai Stock Exchange and the registration process by the China Securities Regulatory Commission.