ReneSola Ltd, a leading fully-integrated solar project developer and provider of energy-efficient products, today announced that (i) the Company has been notified by NYSE Regulation (the "NYSE Notice") of being below the continued listing standards of the New York Stock Exchange (the "NYSE"), and (ii) in connection with the Company's evaluation of its strategic alternatives and its business plan to regain compliance with the relevant NYSE continued listing standard, the Company has entered into a term sheet with Mr. Xianshou Li, the Company's Chairman and Chief Executive Officer ("Mr. Li"), with respect to, among other things, a potential disposition of the Company's manufacturing (including polysilicon, solar wafer and solar module manufacturing) and LED distribution businesses (the "Target Businesses") and a majority or substantially all of its related indebtedness.
The Company is considered below criteria established by the NYSE because the Company's average market capitalization has been less than US$50 million over a 30 trading-day period and its last reported shareholders' equity was less than US$50 million. In accordance with NYSE procedures, the Company has 90 days from the receipt of the notice to submit a business plan to the NYSE demonstrating how it intends to regain compliance with the NYSE's continued listing standards within 18 months. The Company intends to develop and submit such a plan to bring the Company back in compliance within the required time frame.
As previously announced, the Company received a preliminary non-binding proposal (the "Proposal"), dated June 13, 2017, from Mr. Li to acquire the Target Businesses and assume related indebtedness, and on the same day, the board of directors (the "Board") of the Company formed a special committee (the "Special Committee") consisting solely of independent directors to consider the Proposal and other alternatives available to the Company. The Special Committee has been working diligently, with the assistance of its financial and legal advisors, to evaluate the Proposal and other alternatives, and as part of that process, has been engaged in discussions with Mr. Li. As a result of such discussions, on August 26, 2017, the Company executed a non-binding term sheet (the "Term Sheet") with Mr. Li, a copy of which is attached as Exhibit A to this press release.
Among other terms, the Term Sheet contemplates that as a result of the transactions contemplated thereby (including the disposition of the Target Businesses), the Company and its subsidiaries would no longer be liable under an estimated RMB 3.8 billion of bank borrowings related to the Target Businesses, a majority or substantially all of the trade payables owed post-transaction by the Company and its subsidiaries to the Target Businesses (currently estimated to be approximately US$200 million) would be canceled, and, in consideration in part for the cancellation of such payables and other valuable consideration, the Company would issue a specified number of American Depositary Shares (each representing 10 ordinary shares of the Company) ("ADSs") to Mr. Li and/or his affiliates, with such number to be further negotiated between the Special Committee and Mr. Li.
The Board cautions the Company's shareholders and others considering trading the Company's securities that the terms set out in the Term Sheet, including the number of ADSs to be issued by the Company, remain under evaluation by the Special Committee and negotiation between the Company and Mr. Li, and the Special Committee continues to evaluate other alternatives available to the Company. There can be no assurance that that any definitive agreement will be executed relating to the proposed transaction or any other transaction or that this or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.
Whether or not the Company's final business plan relates to the transactions contemplated by the Term Sheet or any other potential transaction, the NYSE staff will evaluate the business plan submitted by the Company to determine whether the Company has reasonably demonstrated its ability to regain compliance within 18 months. In the event the NYSE accepts the plan, the Company will be subject to quarterly monitoring for compliance with the plan and the Company's ADSs will continue to trade on the NYSE during the plan period. In the event the NYSE does not accept the business plan, the Company will be subject to suspension by the NYSE and the NYSE may initiate delisting procedures as appropriate.
The NYSE notice does not affect the Company's business operations or its SEC reporting requirements and does not conflict with any of the Company's contractual obligations.
Source: ReneSola Ltd.
Date: Aug 27, 2017