Second Phase of Strategic Cooperation Between the Two Companies
SAN FRANCISCO, March 13 /Xinhua-PRNewswire/ -- Nitol Solar, an independent polysilicon producer, and Suntech Power Holdings Co., Ltd. (NYSE: STP), one of the world's leading manufacturers of photovoltaic (PV) cells and modules, today announced that they have signed an agreement under which Suntech will acquire newly issued ordinary shares comprising a minority interest in Nitol Solar Ltd. for a total consideration of up to $100 million, subject to the satisfaction of certain conditions.
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Nitol Solar is an independent polysilicon producer which already has a diversified customer base and current supply contracts with an aggregate value of $1.5 billion through 2015. Suntech entered into a multi-year first phase supply agreement with Nitol Solar in August 2007 for the supply of committed monthly volumes of polysilicon to Suntech from 2009 to 2015.
Nitol Solar has over 70 years experience in the chemical industry and is in the process of building a plant with a target production capacity of 3,700 metric tons of polysilicon in 2009, based in Siberia, Russia. The Group already produces commercial quantities of trichlorosilane gas, which is a key material used in the production of polysilicon. The investment will enable Nitol Solar to continue development of the plant, which is expected to be completed in 2009.
Dr. Zhengrong Shi, Suntech's Chairman and CEO, said: "Whilst there are many entrants in the polysilicon industry, we feel Nitol Solar is particularly well positioned due to its long heritage of chemical production. We are delighted to be strengthening our relationship with Nitol Solar at this important point in their development."
Dr. Shi continued, "Our strong financial base puts Suntech in an excellent position to build strategic partnerships to secure increasing quantities of high-quality polysilicon at prices that we believe will accelerate our progress towards achieving grid parity. These partnerships will also enable us to advance other initiatives to rapidly reduce the cost of solar including the implementation of our high efficiency technology into commercial production, capacity expansion and improvements in our operating efficiency."
Dmitry Kotenko, Chief Executive Officer of Nitol Solar said, "We are very pleased that Suntech has come on board as a minority shareholder. They are a high quality partner and well respected in the solar energy field. As we move towards completing the new polysilicon production facility, Nitol Solar is further set to enjoy a strong, independent future as a leading supplier to the solar industry."
Commenting on Suntech's corporate philosophy, Dr. Shi said, "One of the key principles of Suntech's corporate philosophy is a commitment to environmentally responsible manufacturing and compliance with environmental laws. We believe Nitol Solar has a similar commitment both in their current operations and development plans. With this mutual commitment and a common goal of producing grid parity solar products, we look forward to a healthy, long-term partnership with Nitol Solar."
Dmitry Kotenko, Chief Executive Officer of Nitol Solar said, "Our new polysilicon production facility will utilize advanced polysilicon production equipment and the mature Siemens production and recycling process to ensure the clean and safe manufacture of purified polysilicon. We look forward to playing an important role in the manufacturing of clean, renewable solar products."
About Nitol
Nitol Solar is an international Group manufacturing key chemical components for the global Solar Energy industry from an established chemical chlorine and silicon gas facility in the Irtutsk Region, Russia. Nitol Solar's current and envisaged product groups encompass a number of steps in the photovoltaic value chain from trichlorosilane gas through polycrystalline wafers utilized in solar cells. Nitol Solar's aim is to become a global leader in the efficient supply of products for the fast growing solar energy industry. For more detailed information please visit Nitol Solar's website at http://www.nitolsolar.com .
About Suntech
Suntech Power Holdings Co., Ltd. is a world leading solar energy company as measured by both production output and capacity of solar cells and modules. Suntech is passionate about improving the environment we live in and dedicated to developing advanced solar solutions that enable sustainable development. Suntech designs, develops, manufactures, and markets a variety of high quality, cost effective and environmentally friendly solar products for electric power applications in the residential, commercial, industrial, and public utility sectors. Suntech offers one of the broadest ranges of building integrated photovoltaic (BIPV) products under the MSK brand. Suntech has sales offices worldwide and is a market share leader in key global solar markets. For more information, please visit http://www.suntech-power.com .
Safe Harbor Statement
This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements, and includes the satisfaction of conditions to the $100 million investment, Nitol's ability to complete the development of its polysilicon plant, the ability of Nitol to deliver polysilicon supply under its supply agreements, the ability to achieve grid parity, and future compliance with environmental laws. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Further information regarding these and other risks is included in Suntech's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. Suntech does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.