In a recent news release, Sky Solar Holdings, Ltd. (NASDAQ: SKYS), a leading global developer and operator of solar parks, announced its entry into a letter of intent with Solar Partnership Capital Ltd. (“SPC”) through which the latter intends to acquire interests in 152 MW of solar projects from Sky Solar Japan K.K. (“SSJ”). All related projects are classified as operating stage, under-construction, or ‘shovel-ready’. According to the terms of the agreement, SPC has agreed to assume a collection of specified liabilities associated with the SSJ solar projects in exchange for a total purchase price of roughly $165 million. Proceeds from the transaction are expected to be used to repay existing loans that were originated as part of SPC’s tokumei kumiai, or anonymous partnership, investment in SSJ.
“We are very pleased to announce the potential sale of part of our solar asset portfolio in Japan,” Sanjay Shrestha, chief investment officer of Sky Solar, stated in the news release. “Through this transaction, we remain committed to the development of our remaining projects in Japan while also unlocking value from our 74 MW of completed solar projects and 78 MW of solar projects that have not yet been completed in Japan.”
Closing of this transaction is subject to approval by SPC’s investment committee, as well as completion of satisfactory due diligence and mutual agreement and execution of definitive documents. While the existing letter of intent will terminate on August 31, 2016, it can also be extended by mutual consent if additional time is required to satisfy these conditions.
Following approval, Sky Solar will look to continue bolstering its presence in the Japanese solar market and on the global stage. Remaining SSJ assets and liabilities that are not transferred to SPC following completion of the acquisition are expected to be transferred to a new entity in order to facilitate these efforts. With these assets in tow, Sky Solar intends to continue investing in additional solar development projects in Japan while also targeting other global markets that meet its investment return criteria.
News of the potential asset sale in Japan followed an announcement earlier this month that Sky Solar’s wholly-owned U.S. subsidiary, Sky Capital America, Inc., has completed an acquisition of 22.5 MW of development stage permits for projects in California and Vermont. Moreover, the company has unveiled plans to acquire an additional 140 MW of development stage solar project permits later this quarter. Development and construction related to these projects is expected to be completed within the next 18-24 months.
For more information, visit www.SkySolarGroup.com
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