Chinese polysilicon and PV module manufacturer Tongwei has announced a significant plan to acquire competitor Qinghai Lihao Clean Energy.
On February 25, Tongwei disclosed that it intends to acquire 100% equity of Qinghai Lihao Clean Energy Co., Ltd. (“Lihao Clean Energy”) via a share and cash payment, and to raise matching funds. Trading in the company’s A shares, convertible bonds and related conversions was suspended from the opening of the market on the same day, and the suspension is expected to last no longer than 10 trading days.
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Lihao Clean Energy focuses on the research and development, manufacturing and sales of special electronic materials, semiconductor devices and PV equipment and components. It also engages in the import and export of goods and the sales of non-metallic minerals and products.
The business portfolio demonstrates strong synergies with Tongwei’s core business activities. Industry insiders believe this acquisition will further optimise the company’s industrial chain and strengthen its core competitiveness.
Tongwei clarified that the transaction will not change its controlling shareholder or actual controller, does not constitute a connected transaction, and is not expected to constitute a major asset restructuring.
According to the announcement, the proposed acquisition target is all the equity of Lihao Clean Energy, a company established on 29 April 2021, with a registered capital exceeding RMB1 billion (US$146 million). It is an unlisted joint-stock company primarily engaged in the R&D, production and sales of solar-grade high-purity polysilicon, electronic-grade polysilicon and other semiconductor materials.
Lihao Clean Energy has established polysilicon production facilities in both Qinghai and Sichuan provinces in China. According to the company’s official website, Lihao Clean Energy is situated in Nanchuan Industrial Park, Xining Economic and Technological Development Zone, Qinghai Province. It plans to invest a total of RMB20 billion in a project with an annual output of 200,000 tons of solar-grade high-purity polysilicon and 2,000 tons of electronic-grade high-purity polysilicon.
Leveraging Sichuan’s abundant clean hydropower resources, Lihao Clean Energy has also established a wholly owned subsidiary, Sichuan Lihao Clean Energy Co., Ltd., in Yibin, Sichuan. The subsidiary is investing in a production project with an annual output of 200,000 tons of solar-grade high-purity polysilicon, 5,000 tons of electronic-grade high-purity polysilicon and 250,000 tons of industrial silicon.
According to the announcement, Tongwei has signed equity acquisition letters of intent with three prospective transacting parties. They are: Duan Yong, current chairman of Lihao Clean Energy; Hainan Zhuoyue Enterprise Management Partnership (Limited Partnership), founded in May 2021 with a registered capital of RMB40 million, primarily engaged in business management and investment with its own capital; and Hainan Haoyue Enterprise Management Partnership (Limited Partnership), founded in June 2022 with a registered capital of RMB37 million, whose core businesses include investing with its own capital and business management consulting.
