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Taiwan-based solar cell manufacturer, Neo Solar Power (NSP) has revised down its previously planned capital equipment and materials spending plan as a result of the planned merger with DelSolar.
The current industry overcapacity and weaker than anticipated demand in key European markets had already impacted growth plans at the solar cell producer. However, with the merger plans with DelSolar at an advanced stage, excess capacity precludes the near-term need to source new production equipment.
NSP said that its capital spending plan established in mid-2011 called for approximately US$227 million in spending, including raw material sourcing. Push-out of production line expansions resulted in approximately US$45 million of unallocated CapEx, which will now not be needed.
In respect to accounting purposes, NSP’s new plan allocated approximately US$77 million to purchasing machinery and approximately US$150 million to procuring raw materials. The original plan of procuring raw materials from overseas suppliers had been completed in 3rd quarter, 2011.