PVTIME - Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy", the "Company" or "we"), a leading manufacturer of high-purity polysilicon for the global solar PV industry, today announced a strategic plan to extend its access to China's capital markets to further strengthen the Company's leading position in the industry and support its continuous growth over the long run.
Daqo New Energy is considering the opportunity to list, within the
next two years, shares of its principal operating subsidiary Xinjiang
Daqo New Energy Co., Ltd. ("Xinjiang Daqo") on the Shanghai Stock
Exchange's Sci-Tech innovation board (the "STAR Market"), an exchange
intended to support innovative companies in China.
In order to qualify for a STAR Market listing, Xinjiang Daqo is
required by local securities regulations to have multiple shareholders.
As a first step, Daqo New Energy entered into an agreement on June 5, 2020 to sell 4.4% of Xinjiang Daqo's shares to the following four individual investors: Mr. Guangfu Xu (the Chairman of the board of directors of Daqo New Energy), Mr. Xiang Xu (a director of Daqo New Energy), Mr. Dafeng Shi
(a director of Daqo New Energy) and Mr. Longgen Zhang (the CEO and a
director of Daqo New Energy). The four individuals will pay an aggregate
of RMB199.05 million (approximately US$28.0 million at current exchange rates) to Daqo New Energy at a pre-money valuation of Xinjiang Daqo's equity value at RMB4.52 billion (approximately US$637.0 million)
according to a valuation report issued by an independent third-party
firm. Daqo New Energy also has a wholly-owned subsidiary, Chongqing
Daqo, with approximately US$84.1 million of net assets as of 30 April, 2020.
The total proceeds of RMB199.05 million (approximately US$28.0 million) from the investment are due by the end of June 2020,
and will be used to fund Xinjiang Daqo's committed registered capital
shortfall, which is also a requirement for listing on the STAR Market.
Daqo New Energy's Chief Executive Officer Mr. Longgen Zhang
commented, "Our plan to list Xinjiang Daqo on the STAR Market should
enable us to access a new source of growth capital in China's
domestic financial markets, solidify our leading position in the
polysilicon industry, and most importantly, amplify our advantages in
terms of cost structure and quality and accelerate our growth to better
serve the fast growing solar PV market. At the same time, we are
committed to maintaining Daqo New Energy's ADR listing on the New York
Stock Exchange. We believe listing on both stock exchanges will raise
our profile with investors both at home and abroad and provide us with a
greater variety of opportunities in the future."