As part of the expected IPO of SunEdison’s semiconductor wafer and polysilicon operations into SunEdison Semiconductor Limited (SSL), Samsung Fine Chemicals is planning to purchase US$100 million in shares in the spin-off company in private placement.
However, SunEdison will also purchase from Samsung Fine Chemicals shares representing a 35% interest in SMP, its fluidized bed reactor (FBR) based polysilicon joint venture production plant being constructed in Ulsan, Korea.
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SMP was originally established in 2011 as a 50/50 joint venture, part of SunEdison’s ‘asset-lite’ manufacturing strategy.
The latest transaction will see Samsung Fine Chemicals stake in the new plant fall to only 15%, yet its investment has been equal with that of SunEdison. Samsung Fine Chemicals said that it would be focusing its business in other industry sectors in the future.
Separately, Samsung Electronics has entered into an agreement with SunEdison spin-off, SSL which will purchase Samsung Electronics' remaining 20% interest in MEMC Korea Company, in exchange for the issuance by SSL to Samsung Electronics of ordinary shares through a private placement concurrent with SSL's IPO.
“Through continued cooperation and a long-standing relationship with Samsung Fine Chemicals and Samsung Electronics, the respective companies and SunEdison have agreed to these mutually beneficial transactions,” stated Brian Wuebbels, Chief Financial Officer of SunEdison. “Through SMP, SSL will be able to supply nearly all of its requirements for low-cost, high-quality granular polysilicon internally, and will gain a key customer as an investor.”
SunEdison noted in its recently published 2013 Annual Report that its total cash commitments to SMP JV had reached US$116.2 million and expected to invest a total of US$185.0 million through 2014, which is US$10 million higher than the company expected to contribute in that timeframe as reported in its 2012 Annual Report.
The company also confirmed that the new polysilicon plant had experienced further delays than expected with completion of the plant expected in the in the second half of 2014.