Hanwha SolarOne has filed with the Securities and Exchange Commission a shareholder circular, dated December 24, 2014, related to the announcement of a definitive share purchase agreement to acquire Hanwha Q CELLS Investment Co., Ltd. (Q CELLS) in an all-stock transaction (the "Circular") on December 8, 2014.
The Circular contains information including shareholder voting instructions, financial information for the combined entity, detailed financial and operating information about Hanwha QCELLS and a description of the strategic benefits of the transaction. The Circular highlights, among other things, Q CELLS' strengthening operational and financial performance. The Circular also highlights financial benefits of the combination as compared to standalone Hanwha SolarOne (based on non-GAAP combined financial information as of June 30, 2014 and for the six month period then ended):
- Combined revenue will more than double to US$733 million
- Gross margin expansion to 14.5% (versus 11.7% for Hanwha SolarOne alone)
- Significantly improved working capital and operating cash flow
- 281% increase in cash to almost US$450 million
- Reduced debt-to-equity ratio to 232% (versus 377% for Hanwha SolarOne alone)
- 129% increase in shareholders' equity to US$674.3 million
Mr. Seong Woo Nam, chairman and chief executive officer of Hanwha SolarOne, commented: "As stated in the December 8th, 2014 announcement, there are many strategic benefits of the transaction. Q CELLS brings industry-leading technology and R&D that can be leveraged across the combined product portfolio, as well as downstream expertise in development, EPC and project financing. At the same time, the combined company plans to further improve the combined company's cost competitiveness by leveraging Hanwha SolarOne's cost-efficient module manufacturing base together and Q CELLS' industry-leading, highly efficient and fully automated cell manufacturing capabilities. Hanwha SolarOne believes that the combined scale and optimized global footprint will strengthen Hanwha SolarOne's strategic and financial position and should enable Hanwha SolarOne to accelerate growth in the most important solar markets."
Mr. Nam also commented on the combined company's broad geographic footprint and ability to service the US market free of tariffs. By leveraging their global manufacturing locations in Germany, South Korea, Malaysia and Canada, they can provide over 600MW of tariff-free PV modules to the U.S. in 2015 and over 1GW in 2016.
