Xinyi Energy (3868) and Xinyi Solar (0968) announced that the application for a possible spin-off listing of the Xinyi Energy New Energy Fund has been acknowledged and accepted by the Shenzhen Stock Exchange on September 24.
The New Energy Fund is currently expected to raise 1.62 billion yuan (HK$1.89 billion) through the Fund PRC public offering. Following completion of the public offering and listing, the target entities, two utility-scale ground-mounted solar farms located in Wuhu City and Lu’an City, will no longer be subsidiaries of Xinyi Energy as it will not have management control over the XYE New Energy Fund.
Following completion of the possible spin-off, the company is expected to realize, within a shorter timeframe, the economic value of the target projects, which are solar farm projects operated under the feed-in-tariff regime; and to receive recurring fee income to the group from the provision of operation and management services by the service manager.
In addition, the subscription for the units would provide regular distributions to XYE during the term of the XYE New Energy Fund under its fixed distribution policy.
The liquid financial resources generated from the possible spin-off will be used by XYE for new investment opportunities and general working capital purposes. The company intends to apply the recovered funds towards the construction of the real estate projects described in the draft PRC offering and listing documents.
