Swiss-owned solar manufacturer Meyer Burger has clarified the terms of its recently-announced rights issue, designed to raise money towards its US manufacturing expansion plans.
As per its announcement in February, the rights issue will seek to raise CHF 200 million (US$225 million) towards its Arizona module assembly plant and Colorado cell production plant, both of which are under construction. The sites will produce heterojunction technology (HJT) products.
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Meyer Burger will issue up to 20,144,423,886 new shares at a subscription price of CHF 0.01 per share. Eligible current shareholders will receive one subscription right for every share they own, and five share rights will enable the holder to subscribe for up to 28 new shares. In an Extraordinary General Meeting held yesterday (18 March), shareholders – representing nearly 38.1% of the share capital entered in the Commercial Register – approved the terms of the ordinary capital increase.
The manufacturer’s biggest shareholder, Sentis Capital, has committed to exercise all of its subscription rights up to a value of CHF 50 million (US$56 million) and potentially to purchase shares that are not subscribed in the rights issue. According to Reuters, Setis Capital is owned by Russian billionaire Petr Kondrashev.
A subsidiary of Meyer Burger’s largest client, D.E Shar Renewable Investments (DESRI), has agreed to purchase unsubscribed shares up to the value of US$20 million. The two companies signed a 5GW module supply agreement in 2022.
These two commitments represent 33.5% of the target gross proceeds of the capital increase. Members of the company’s board of directors and executive committee also intend to exercise their subscription rights, covering another 0.37% of the share capital in aggregate.
In a statement, the company said that it “continues to pursue additional financing sources” to support its US expansion. In particular, it highlighted the Section 45X manufacturing production credit, which it cited as a reason for its move to the US in a letter to the US Internal Revenue Service in November 2022.
Finances in the red
Meyer Burger closed 2023 with a US$330 million net loss. It abandoned its production facility in Thalheim, Germany, in January 2024, following a year in which the European solar manufacturing industry was squeezed by lowering prices and a glut of imports from Chinese companies.
In a joint statement following its earnings call, chairman Franz Richter and CEO Gunter Erfurt said: “As the year progressed, it became clear that dumping prices from Chinese suppliers in Europe, coupled with a sharp rise in Chinese production overcapacity and a lack of market protection, led to unprecedented distortions in the European solar market, which had a serious impact on Meyer Burger’s earnings.”
However, their US forecast was more optimistic: “Assuming that cell and module production at the US sites can be ramped up as planned, the group expects to generate an annual EBITDA of around CHF250 million per year in the medium term from its business in the US.”