XINYU CITY, CHINA & SUNNYVALE, USA: LDK Solar Co. Ltd, a leading manufacturer of solar wafers, signed an indicative term sheet with VMS Investment Group Ltd. and its affiliates, or the "Investors," pursuant to which the Investors have agreed to subscribe between $50 million to $80 million aggregate amount of redeemable and convertible preference shares of the Cayman Islands subsidiary, which is to be created to hold and operate LDK Solar's polysilicon business, valuing the entity at $1.30 billion to $1.65 billion.
The transaction will require a reorganization of LDK Solar's polysilicon business through which the assets and liabilities relating to the polysilicon business would be assumed by the newly created subsidiary, which will be wholly owned by LDK Solar.
The terms of the securities have a two year maturity and are convertible at the option of the holders at a conversion ratio that includes an investment internal rate of return. The investment is expected to close by the end of March 2010. The transaction contains customary conditions to closing.
"We look forward to working with VMS Investments on potential strategic alternatives with our polysilicon business. VMS Investments is very knowledgeable about the sector and shares our view of the importance of polysilicon in the PV value chain," said Xiaofeng Peng, Chairman and CEO of LDK Solar. "I am delighted to have them as a partner."