Trina Solar, newly crowned as 2014’s top module manufacturer, is buying a minority stake in Shuntai Leasing in a move aimed at underpinning its downstream and manufacturing growth plans.
The company has acquired a 28% stake in Shuntai Leasing, a subsidiary of the state-owned Changzhou Hi-tech Group, which is involved in a range of government financing and city development enterprises in the eponymous city in eastern China’s Jiangsu province.
According to Trina, Changzhou Hi-Tech owns several financing institutions and has raised approximately US$5.5 billion in recent years.
Trina said it had signed a cooperation agreement with Shuntai to finance its downstream and solar manufacturing businesses, both of which it is planning to ramp in the new year.
“We are delighted to announce this investment in Shuntai,” said Jifan Gao, chairman and CEO of Trina Solar. “Changzhou Hi-tech Group is our long-term strategic partner with whom we have developed a deep and trusting relationship.
“Our future cooperation with Shuntai will enable Trina Solar to expand its financing channels and better support our downstream business as well as our module business. We believe our investment in Shuntai together with our financing cooperation best leverage each party's strengths and we are confident it will drive future value for both Trina Solar and Shuntai.”
In a briefing note on the deal, investment firm RBC Capital Markets said it expected Shuntai to provide capital leasing to finance project and manufacturing equipment to Trina. “It will help to lower the near term cash requirement for Trina in project development and capex investment,” the firm said.
Trina expects the transaction to be closed by the end of this year.