SunPower’s buyout price of Lopez stake in solar venture slashed
AFTER earlier ordering the local unit of US-based solar energy firm Sun Power Corp. to buy out the 74.54 percent stake held by the Lopez group in a disputed solar wafer slicing venture, an arbitration tribunal has reduced the purchase price order from $30.3 million to $23.2 million.
But the International Chamber of Commerce retained an order for the SunPower Philippines Manufacturing Ltd. (SPML) to pay First Philec Solar Corp. (FPSC) the sum of about $25.24 million as compensation for wafers not taken by SPML and for unpaid silicon solar wafering services under the supply agreement.
These orders were contained in the second partial award dated last July 14 rendered by the ICC in the arbitration proceedings brought by FPSC and First Philippine Electric Corp. (First Philec) against SPML, Lopez-led First Philippine Holdings Corp. (FPH) said in a disclosure posted on the Philippine Stock Exchange on Monday.
FPSC is a joint venture company established by First Philec and SunPower to slice silicon solar wafers for SunPower. First Philec is a wholly-owned subsidiary of FPH.
First Philec owns 74.54 percent of FPSC and 14.49 percent is held by SPML while a number of individual shareholders own 10.97 percent.
The previous partial award dated January 28, 2015 had found SPML to be in “material anticipatory breach” of its obligations to FPSC under the supply agreement for silicon solar wafering services between FPSC and SPML. It also found SPML to be in “material breach” of its obligations to First Philec under the joint venture agreement between First Philec, SPML and the individual shareholders.
As such, the first partial award ordered SPML to purchase First Philec’s shares for $30.3 million and within 14 days of the transfer of shares to SMPL, pay FPSC the net sum of $25.24 million as compensation for unpaid water products and services.
But subsequent to the first partial award, the individual shareholders notified SPML and First Philec that they were willing to accept $7.157 million for their 10.97 percent shareholding in FPSC upon completion of SPML’s purchase, the FPH disclosure said.
“In the second partial award the arbitral tribunal found it appropriate to reduce the purchase price to be paid by SPML to First Philec for First Philec’s shares in FPSC (equal to 74.54% of the total) from $30.3 million to $23.2 million, the reduction of $7.1 million being approximately equal to the amount that the individual shareholders have committed to accepting from SPML for their 10.97 percent stake,” the disclosure said.
SPML is now required to buy out First Philec’s shares in FPSC by Aug. 13 this year, subject to any extension granted by the arbitral tribunal for the purposes of compliance with applicable governmental and/or regulatory requirements. Within 14 days of the completion of the share transfer, the SunPower unit is also required to pay FPSC the net sum of $25.24 million.
The disclosure added that the arbitral tribunal would subsequently render a further final award dealing with the matter of which party or parties will be responsible for the costs of the arbitration alongside directions which may be required in completion of implementation arrangements.
