Singapore-listed Chinese environmental protection solutions specialist Sunpower Group has announced plans to raise $70 million by issuing a second tranche of convertible bonds due 2022 to its two existing Chinese investors, according to a company filing.
Sunpower Group disclosed that DCP Capital Partners and CDH China Asset Management Company Ltd will subscribe to $70-million worth of the company’s bonds, which are convertible into fully paid ordinary shares in the capital of Sunpower Group.
The $70-million investment by DCP and CDH is in addition to the $110-million in convertible bonds that the two investors subscribed to in the first tranche of the offering, Sunpower Group said.
The company is also issuing warrants exercisable at an aggregate amount of $30 million, with exercise per share of S$0.70, if exercised between issuance and up until the end of 2019, or S$0.80 if exercised in 2020.
Sunpower said the transaction will give it an additional war chest of approximately $175 million to expand its green investment portfolio.
“By securing this capital to expand its green investment portfolio, the group will be well-positioned to build and acquire scarce and attractive assets immediately, and if successful, such green investment will be EPS accretive and value accretive to the Group,” Sunpower disclosed.
It added that green investment businesses are able to generate long-term, stable, and recurring income for the group. Additionally, Sunpower said it is well positioned to capitalize on the high-quality earnings from the green investment businesses to maximize the present value of its future cash flows.
Sunpower has already invested $146 million equity in operating projects and projects under construction and plans to invest another $245 million in pipeline projects, including all of the $70 million from the new convertible bonds, which it expects to fully utilise in 2019.
“The company will make an application to the Singapore Exchange Securities Trading Limited in due course for the listing and quotation of the Conversion Shares and the Warrants Shares to be issued upon conversion of the Tranche 2 convertible bonds and exercise of the Warrants,” it said.
Sunpower Group recorded earnings of about $12.88 million in the first quarter of this year, compared to a loss of about $13.1 million from a year earlier.
Sunpower was incepted in 1997 and is listed on the SGX Mainboard. Its main businesses include environmental equipment manufacturing, engineering, procurement and construction (EPC), integrated Solutions (flare-gas recovery system, Zero Liquid Discharge (ZLD) system, photovoltaic power generation and petrochemical engineering) and Green investments.
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