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Struggling EPC and project developer, SPI Solar is entering into a private share placement with four Hong Kong shell companies to raise a US$21.75 million lifeline after recently reporting it had only US$1 million in cash and cash equivalents at the end of 2013.
SPI Solar is majority owned (70%) by LDK Solar, which is undergoing bankruptcy proceedings and delisted from the New York Stock Exchange (NYSE).
The company said that four investment firms had agreed to purchase 135,937,500 of its shares at US$0.16 per share for an aggregate purchase price of US$21,750,000.
However, searches failed to reveal any meaningful information about the firms, which included Robust Elite Limited, Y&C Investment Co., Ltd, Well Vast Investment Limited and Happy Goal Industries Limited, all seemingly based in Hong Kong.
In a related press release, which did not disclose the investors, Min Xiahou, global chief executive officer of SPI Solar said: “We are very pleased by the commitment demonstrated by these investors in this private placement. We intend to use the proceeds from the private placement to enable SPI Solar to improve its financial condition and continue to build upon the recent and demonstrated progress we’ve made in moving forward on projects while exploring solar business opportunities.”
SPI Solar said that it expected the sale of the shares to close within the next three months.
Hong Kong-based property tycoon, Zheng Jianming has a large share holding in LDK Solar’s China-based manufacturing operations as well as a major stake in PV project developer and solar wafer producer Shunfeng. Zheng personally fronted the money required for Shunfeng to acquire bankrupt Wuxi Suntech as part of a bigger scheme to become a fully-integrated polysilicon to PV module leader and project developer globally.