Gintech, Solartech and NSP to Merge and Establish United Renewable Energy Co., Ltd.
 
Oct 17, 2017
Category:

Three Taiwanese solar cell manufacturers (each a "Company" and collectively "the "Companies") -- Gintech Energy Corporation (TWSE: 3514; "Gintech"), Solartech Energy Corp. (TWSE: 3561; "Solartech") and Neo Solar Power Corp. (TWSE: 3576; "NSP") -- jointly announced that their boards of directors have respectively adopted a resolution today to execute a Letter of Intent with the other Companies, representing the three Companies' intent to merge into one company (the "Proposed Merger").

The three Companies are solar cell manufacturers in Taiwan with their own unique niche and have been contributing to the growth of the solar energy industry for more than 10 years. Apart from solar cells, each Company also participates in different production segments of the silicon wafer, module, power grid, and other solar energy supply chains. Faced with a highly competitive and increasingly concentrated market, the Companies believe that Taiwanese manufacturers should come together to form a solar flagship company with a competitive edge on the global market and build a flourishing and prosperous integrated platform. The Proposed Merger process will be implemented based on an equal and mutually beneficial principle without designating any of the Companies as the acquiring or the acquired party. However, in order to comply with Taiwanese laws, the Companies agree that NSP will be the surviving company after it merges with the other two partners. The surviving company will be renamed United Renewable Energy Co., Ltd. ("UREC") after the Proposed Merger effective date so that all Companies could stand on an equal play field.

UREC will create a new business model for Taiwan's green energy industry. In addition to maintaining its leading role in solar cell technology, UREC is built up to become the paragon of vertical integration of the Taiwan industry by enlarging domestic and overseas investment in module, building self-owned high quality module brand, and stepping into power plant development businesses. The establishment of UREC will allow Taiwan's solar cell industry to get rid of its role as foundries and further urge the green energy industry to root and grow strongly in Taiwan. It would also drive joint development of the related industry chains which will cover energy materials, electromechanical and relevant services.

In the hopes of boosting the competitiveness of UREC and in consideration of the Companies' plan of industrial upgrade as well as Taiwan's energy policy direction, the Companies have started to work with relevant government agencies to garner their support. The initial consensus at the moment is to have the National Development Fund under the Executive Yuan and other organizations appointed by the government investing in the Companies under appropriate terms and conditions. Such investment will mainly be utilized as the Companies' capital expenditures. The Companies will soon file an official investment proposal with the National Development Fund and other organizations appointed by the government. Under the government-backed support, the success of UREC will assist the transformation of Taiwan's energy supply, and the green energy would then be able to become one of the main power supply options other than petrochemical energy.

While the Letter of Intent is not legally binding, the Companies are aiming to have their respective boards adopting resolutions to execute a legally binding merger agreement by the end of December of 2017 and to complete the merger process on the third quarter of 2018. Such decision will be made after thorough research and deliberation among the Companies' management teams, with the goal of maximizing the benefits for the industry, their employees, partner banks and investors as well as reaching the objectives set forth in our nation's green energy policies.

After a comprehensive review of the Companies' share prices, net values, operational performances, business development and other factors pertaining the Companies' operations, the tentative share exchange ratio of the Proposed Merger will be as follows: one common share of Gintech for 1.39 common shares of NSP; one common share of Solartech for 1.17 common shares of NSP. The foregoing share exchange ratios are subject to change depending on further assessment of each Company's obligations and liabilities. The final share exchange ratios will be specified in the definitive merger agreement.

Dr. Sam Hong and Dr. Wen-whe Pan are expected to serve, respectively, as the Chairman and CEO of UREC, the surviving company after the Proposed Merger.

With an aim of mutual benefit and reciprocity, UREC welcomes other Taiwanese solar companies to join the integrated platform under appropriate terms and conditions after the Proposed Merger, so as to facilitate the sustainable development and upgrade of Taiwan's solar power industry.

The Letter of Intent executed by the three Companies on October 16 of 2017, while not legally binding, aims to confirm the intention of each partner and the principles of the Proposed Merger. As the negotiations of the Proposed Merger are still underway, the terms (including but not limited to the share exchange ratios and the surviving company) and each parties' right and obligations are still to be discussed and agreed upon after the signing of this Letter of Intent. Please note that it is possible that the definitive merger agreement for the Proposed Merger will not be signed, and the Proposed Merger might not be closed even if such agreement has been executed.

For any follow-up information about the Proposed Merger, please refer to the Material Information page of the Market Observation Post System.

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From left to the right: NSP President, Gintech President, NSP Chairman and CEO, Gintech Chairman, Solartech Chairman, Solartech President.

For further information, please contact:

Gintech Energy Corporation
Ms. Evelyn Hung
TEL:+886-2-2656-2000 ext. 8163
E-mail:evelyn.hung@gintech.com.tw

Solartech Energy Corporation
Mr. Alex Wu
Senior Vice President/Company Spokesman
TEL:+886-2-2171-2388 ext.1500
E-mail:alex@solartech-energy.com

Neo Solar Power Corporation
Ms. Shirley Chen
Investor Relations Dept.
TEL: +886-3-578-0011 ext. 20626
E-mail: shirley.chen@nsp.com

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