Executives of Motech Industries and Neo Solar Power Are Reportedly Engaged

Executives of Motech Industries and Neo Solar Power, both Taiwanese solar-cell makers, are reportedly engaged in intensive talks for the acquisition of Neo Solar by Motech. After the acquisition, Motech will boast total capacity of 3GW, ranking the third largest in the world. As of the third quarter this year, both Motech and Neo Solar were still in the red but maintained high liquidity. At the end of September, Motech possessed cash equivalent of NT$10.3 billion, with debt ratio reaching 52% and Neo Solar owned cash equivalent of NT$4.453 billion, with debt ratio amounting to only 41%. In contrast with the strained finance of mainland Chinese peers, Motech will have NT$15 billion of cash equivalent in hand, should it succeed in merging with Neo Solar, greatly boosting its strength to weather the difficult times. Spokesmen of both Motech and Neo Solar denied the reported merger yesterday (Nov. 4), only stressing that “integration of the industry is an inevitable trend. ” Insiders noted that the two companies have similar corporate culture, as management of both companies used to work at Taiwan Semiconductor Manufacturing Corp., and both companies own distinctive technologies, enabling them to greatly enhance their international competitiveness via merger. Insider sources said that management of both companies have reached a consensus for the merger but are still discussing such details as whether to complete the merger via share swap or cash buyout. In fact, previously both Motech and Neo Solar explicitly expressed the possibility of undertaking merger with peers. Chang Ping-heng, president of Motech, remarked that amid the current industrial sluggishness, it is unlikely for enterprises to rely on their own fund to expand scale and the trend of merger in the industry is inevitable. At present, Motech boasts annual capacity of 1.5GW, which will be expanded to 1.6GW at the end of this year, with global market share of 4%, ranking sixth place and Neo Solar boasts annual capacity of 1.3GW, with global market share of 3%, ranking eighth place. After their merger, the new company will possess 3GW of capacity, with global market share of 7%, ranking 3rd placer, after First Solar Inc. Of the U. S. And JA Solar of mainland China. Source: CENS