Canadian Solar subsidiary CSI Solar raises $260 million

Canadian Solar at a trade show

Canadian Solar has agreed to a RMB 1.78 billion or approximately $260 million capital raising for its Module and System Solutions subsidiary, CSI Solar.

This capital raising is an important step for CSI Solar to qualify for the planned carve-out IPO in China, and brings in institutional investors and strategic partners, including CDH Investment Management Company and SIP Oriza PE Fund Management, among others.

The Third-Party Investors have agreed to purchase existing CSI Solar shares from the company for an aggregate of RMB 1.50 billion or $219 million at an equity valuation of RMB 7.50 billion or $1.1 billion.

A number of Canadian Solar employees will also purchase existing CSI Solar shares from the company for an aggregate of RMB 31 million or $4.5 million.

Eligible CSI Solar employees and board members have agreed to subscribe to newly issued CSI Solar shares via platforms set up in accordance with CSI Solar’s employee stock ownership plan for an aggregate of RMB 248 million or $36 million at a valuation discount of 30 percent, or RMB 5.25 billion or $768 million.

Canadian Solar, the Third-Party Investors, Employees and ESOP platforms will respectively own 74.9 percent, 20.0 percent, 0.4 percent and 4.7 percent of CSI Solar.

Canadian Solar CEO Shawn Qu said: “The fundraising will give us the capital to expand our manufacturing capacity to support our targeted 18GW to 20GW in shipments for 2021. This strategy will allow us to expand our market share and enhance our future pricing power and maintain better control over our manufacturing costs.”

Canadian Solar will actively prepare for the planned listing pursuant to relevant laws and regulations in China. Canadian Solar is committed to its shareholders and NASDAQ listing and will remain the majority and controlling shareholder of CSI Solar after its planned IPO in China.