THORNTON, USA: Ascent Solar Technologies Inc. and TFG Radiant Group have signed a more than $275 million plus royalties long-term, multi-faceted, strategic partnership that includes (i) investments by TFG Radiant in Ascent and (ii) a joint development agreement between TFG Radiant and Ascent to establish manufacturing facilities to be located in East Asia. Under the agreement, TFG Radiant has committed $165 million for the initial East Asia FAB, bringing the total deal value to about $450 million plus royalties.
TFG Radiant has purchased 6,400,000 shares of Ascent stock at a price of $1.15 per share ($7.36 million), which represents a premium of 56% relative to the closing price of Ascent stock on August 12, 2011. In addition, under certain conditions (including Ascent obtaining the approval of its shareholders together with TFG Radiant meeting certain performance requirements relating to the initial FAB construction) TFG Radiant will receive the right to purchase an additional 9,500,000 shares of Ascent stock, at a price of $1.55 per share ($14.7 million).
In connection with the investment, TFG Radiant has the right initially to appoint one member to Ascent’s Board of Directors, and entitlement to appoint a second member if TFG Radiant’s ownership percentage increases in the future pursuant to the exercise of its stock purchase option.
Ascent has agreed to exclusively license its technology for fabrication and distribution of flexible, lightweight copper, indium, gallium, diselenide (“CIGS”) photovoltaic modules to TFG Radiant for East Asia. The East Asia territory includes China, Taiwan, Hong Kong, Malaysia, Indonesia, Thailand, Korea, and Singapore. Ascent retains all rights for the US and rest of the world.
Pursuant to the strategic alliance, in addition to continuing to ramp its existing FABs and improve its technology, Ascent will develop a next-generation PV production line in Colorado. Based on Ascent’s technology, TFG Radiant will build its first fabrication facility in China, with a projected direct investment of over $165 million. This FAB is expected to have an initial annual production capacity of 100 MW.
TFG Radiant will cover consulting costs for Ascent personnel in helping to install and bring online the FAB in China. Ascent will receive partial ownership of the China FAB and royalties on all sales from that FAB. TFG Radiant also has the right to build, at its cost, multiple additional FABs for the East Asian markets and Ascent will receive partial ownership, royalties and consulting fees for all such FABs.
Ascent will receive license fees and non-recurring engineering fees from TFG Radiant. In addition, Ascent will receive milestone payments tied to the achievement of certain production and cost goals. The total of such milestone payments could exceed $250 million over multiple years.