Under a new agreement between TPG Capital and Comtec Solar Systems Group, TPG will invest a total of US$150 million through newly issued convertible bonds and warrants. TPG has subscribed for unsecured convertible bonds, which are due in 2016 with an aggregate principal of US$100 million. The bonds are zero interest and will be able to transfer into Comtec’s new ordinary shares at an initial conversion price of US$0.50 per ordinary share. If the bonds are not exchanged after five years, they will be redeemed at par.
Furthermore, under the agreement TPG will be allocated 95 million warrants with the ability to subscribe for one ordinary share each at an initial exercise price of US$0.53 per warrant. The warrants have a maturity date of five years, but if they are exercised in full, TPG will commit an added US$50.15 million for the receipt of 95 million new Comtec ordinary shares.
Overall, TPG’s investment totals US$150.4 million with 295 million in ordinary shares, which are equal to almost 21% of the complete enlarged issued share capital of Comtec, with the assumption that the bonds are fully converted and the warrants are entirely exercised.
Stephen Peel, managing partner of TPG Asia, stated, “The investment in Comtec is consistent with TPG's strategy of collaborating with high quality companies in China. Comtec is our first China-based solar investment, and we are confident in Comtec's ability to expand successfully. We believe the strengths of both parties will contribute to an effective partnership.”
Once the agreement reaches closing, Comtec will collect almost US$100 million in gross proceeds from the issued convertible bonds, which will go towards increasing production capacity. Moreover, Comtec anticipates gaining an added US$50 million once the warrants are fully exercised.