Xinte Energy plots share issue to pay down new polysilicon facility

One of Xinte’s existing polysilicon facilities in China. Image: Xinte Energy.

Xinte Energy has unveiled plans to sell nearly 180 million shares in the company to raise funds for a new 100,000 ton polysilicon production facility.

In a statement to the market issued late last week, polysilicon producer Xinte said it intended to sell a maximum of 177.3 million ordinary shares in the business, the proceeds of which would be used to “seize the rapid development opportunities” within the solar PV industry and enhance the company’s competitive position in polysilicon supply.

Xinte noted two letters of intent, signed by existing shareholder TBEA and Jinglong Technology, which commit the companies to procuring shares within the issue. TBEA has committed to purchasing 94.36% of the offering, with Jinglong agreeing to take up the remaining 5.64%.

The pricing of the shares, and therefore the overall gross proceeds from the offering, has yet to be confirmed, however Xinte has said proceeds will be used primarily to pay down capex costs associated with a planned 100,000 ton polysilicon production facility being brought forward by subsidiary Inner Mongolia Xinte.

That facility is expected to cost a total of RMB3.5 billion (US$546 million). Construction was slated to start this quarter and take around 18 months to complete. Xinte said proceeds from the issue would reduce pressure on existing capital reserves and also possibly allow construction of the facility to be sped up, responding to current supply chain constraints.

The facility will produce electronics-grade polysilicon suitable for use in n-type silicon wafers, the company said.

Proceeds from the offering diverted to Inner Mongolia Xinte through means of a capital injection will not exceed RMB2 billion, Xinte said, however if net proceeds fall below RMB2 billion, the entirety of proceeds from the share issue will be used.

The plans still require shareholder approval, with a vote scheduled for later this month.

With polysilicon pricing surging, producers are expediting plans to increase supply in order to respond to demand. Rival polysilicon producer Daqo New Energy is also aiming to complete new production facilities in the next 18 months, and earlier this month made progress with its plans to list on Shanghai’s STAR Market to raise funds.