ReneSola makes $325M acquisition, lowers ’09 guidance

China-based wafer manufacturer ReneSola (NYSE:SOL) said today it signed an agreement to acquire Dynamic Green Energy for about $325 million, as it lowered its third quarter and full year outlook for 2009.

ReneSola is planning to issue 26.8 million new shares and $10 million in convertible promissory notes for Dynamic Green Energy, a subsidiary of Jiawei Solarchina and other Chinese operating subsidiaries. ReneSola currently has about 140 million outstanding shares.

Dynamic Green Energy manufactures solar products including ingots and photovoltaic modules as well as providing original equipment manufacturing services to solar manufacturers.

In another announcement today, ReneSola said it is planning a follow-on public offering of at least 14.4 million American Depositary Shares (ADS), each representing two ordinary shares, to be used for general corporate purposes including capital expenses.

The company plans to grant underwriters an option to purchase up to an additional 2.16 million ADS.

In addition to revising its third quarter revenue outlook, ReneSola slashed its 2009 revenue guidance, attributing it to delays in price improvements of its solar products.

Its 2009 revenue is expected to be in the range of $470 million to $500 million, down from a previous forecast of $500 million to $550 million.

Its third quarter 2009 revenue outlook is predicted to be in the range of $130 million to $140 million, with its gross margin expected to be similar to that of its second quarter 2009.

The company’s shipment outlook is expected to be the same as originally expected for 2009 with 450 megawatts to 500 MW (see Orders are up as Chinese solar power companies post 2Q09 profits, losses).

ReneSola’s customers are solar cell and module manufacturers including JA Solar, Motech Industries, Solarfun Power Holdings and Suntech Power Holdings.

In January, ReneSola secured a loan of RMB 800 million ($117 million) to build a polysilicon plant (see ReneSola secures $117M loan for polysilicon plant).

ReneSola delayed the project in late 2008 to conserve capital during the global credit crunch. The company has also previously lowered its earnings estimates for 2009 (see Bad news from Q-Cells spreads through solar supply chain).

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