HSOL (MM)

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN ISSUER

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the Month of December 2014

Commission File Number 1-33208

 

 

HANWHA SOLARONE CO., LTD.

 

 

888 Linyang Road

Qidong, Jiangsu Province 226200

People’s Republic of China

(Address of Principal Executive Offices)

 

 

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F  x            Form 40-F  ¨

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1).)

Yes  ¨            No   x

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).)

Yes  ¨            No   x

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

Yes  ¨            No   x

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-            )

 

 

 

---

Hanwha SolarOne Co., Ltd. (the “Registrant”) is furnishing under the cover of Form 6-K:

Exhibit 99.1 Deal Announcement Deck.

Exhibit 99.2 Frequently Asked Questions.

---

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

				HANWHA SOLARONE CO., LTD
Date: December 9, 2014				By:		/s/ Seong Woo Nam
						Name: Seong Woo Nam
						Title:   Chairman and CEO

Exhibit 99.1

 

 

CREATING A NEW GLOBAL LEADER

IN SOLAR POWER

M&A Announcement December 8, 2014

---

 

Disclaimer

The market and industry information contained in this presentation has not been independently verified. No representation or warranty, whether express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. Neither Hanwha SolarOne Co., Ltd, (“SolarOne”) or Hanwha Q CELLS Investment Co., Ltd. (“Q CELLS”), nor any of their respective affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation.

Additional Information about the Transaction

The total revenue for SolarOne and Q CELLS for the six month period ended June 30, 2014 set out below does not constitute pro forma financial information and is not necessarily indicative of or intended to represent the results that would have been achieved had the transaction been consummated as of January 1, 2014 or that may be achieved in the future.

In connection with the transaction described in this announcement (the “Transaction”), SolarOne will furnish to the U.S. Securities and Exchange Commission (the “SEC”) a report on Form 6-K regarding the Transaction, which will include as exhibits thereto the share purchase agreement, dated December 8, 2014, among SolarOne, Q CELLS and Hanwha Solar Holdings Co., Ltd. (“HSH”) and a new shareholder agreement, dated December 8, 2014, between SolarOne and HSH that will, upon consummation of the Transaction, replace and terminate the existing Shareholders Agreement, dated September 16, 2010, by and between SolarOne and HSH, as amended by Amendment No. 1, dated November 12, 2013. All parties desiring details regarding the Transaction are urged to review these documents, which will be available at the SEC’s website (http://www.sec.gov).

In connection with the Transaction, SolarOne will prepare and mail a shareholder circular to its shareholders, which will be filed with or furnished to the SEC. INEVSTORS AND SHAREHOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE SHAREHOLDER CIRCULAR AND OTHER MATERIALS FILED WITH OR FURNISHED TO THE SEC WHEN THEY BECOME AVAILABLE, AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION AND RELATED MATTERS.

Investors and shareholders may obtain a free copy of the shareholder circular and other documents that SolarOne prepares and mails to its shareholders on SolarOne’s website at www.hanwha-solarone.com. In addition, these documents can be obtained, without charge, by contacting SolarOne at its Investor Relations contact. This announcement is neither a solicitation of proxies, an offer to purchase nor a solicitation of an offer to sell any securities.

Safe-Harbor Statement

This announcement contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 27A of the

Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These risks and uncertainties include, among others, the timing to consummate the Transaction; the risk that a condition to the closing of the Transaction may not be satisfied; the risk that shareholder and any required regulatory or other approvals for the Transaction are not obtained, are delayed or are subject to conditions that are not anticipated; the diversion of management time on Transaction-related issues; the ultimate timing, outcome and results of integrating the operations of SolarOne and Q CELLS; the risk that expected synergies and other benefits from the Transaction may not be realized; and the impact of any litigation and regulatory proceedings. Further information regarding these and other risks is included in SolarOne’s filings with the SEC, including its annual report on Form 20-F. Except as required by law, SolarOne does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

2

---

 

Today’s Announcement

Hanwha SolarOne and Hanwha Q CELLS combining in

M&A transaction

Creates a new global leader in solar industry with strong technology leadership

All stock transaction with combined company valued at approximately $2.0(1) billion on an enterprise value basis

Compelling opportunity to increase long term shareholder value

(1) Based on Hanwha SolarOne closing share price as of December 5, 2014

3

---

 

Compelling Deal Rationale

1

Industry Leading Scale w. Differentiated Global Footprint

2

Complementary Positioning in Key Global Markets

3

New Growth through Accelerating Downstream

4

Long Term Value Creation through LCOE(1)-driven Products

5

Revenue and Cost Synergy Opportunities

(1) LCOE: Levelized Cost of Energy

4

---

 

Table of Contents

Section I. Transaction Overview 5 Section II. Q CELLS, Industry Pioneer 10 Section III. Deal Rationale 16

Section IV. Hanwha Group, 26 Strong Commitment in Solar

5

---

 

Transaction Terms

? Hanwha SolarOne (“SolarOne”) will acquire Hanwha Q CELLS (“Q Transaction CELLS”) in an all stock transaction.

Structure ? The combined company will be valued at $2.0 bn(1) on an enterprise value basis

? SolarOne to issue an equivalent of 8.09 shares for each of its outstanding shares to Q CELLS’ shareholder, Hanwha Solar Holdings Co., Ltd (“HSH”)

? SolarOne shareholders to hold 457.4mm(2) shares, or 11.0% of the Exchange Ratio combined company

& Ownership ? HSH to receive 3,701.1mm shares in the combined company, or 89.0% of the combined company ? Upon closing, total number of shares issued and outstanding will be 4,158.5mm

Conditions ? SolarOne shareholder and customary regulatory approvals

& Timing ? Expected closing in 1Q 2015

(1) Based on Hanwha SolarOne closing share price as of December 5, 2014

(2) As of 3Q 2014, fully diluted basis, represents 91.5mm of ADSs (1 ADS = 5 shares)

6

---

 

New Company Structure

? Dual headquarters in Korea and Germany Headquarters • Global Executive HQs: Seoul, Korea

& Listing • Global Technology & Innovation HQs: Thalheim, Germany

? Listing on Nasdaq (NASDAQ: HSOL)

? CEO: Seongwoo Nam ? CCO: DK Kim

Leadership Team

? CTO: Jinseog Choi ? CFO: Jay Seo

7

---

 

Company Snapshots

Founded ? 1999 ? 2004

Headquarters ? Thalheim, Germany ? Qidong, China Employees ? 1,797 ? 7,540 1H-14 Revenue(1) ? $416 million(2) ? $366 million(2)

? Cell: 1.53 GW (2014) ? Cell: 1.75 GW (2014) Capacity ? Module: 130 MW (2014) ? Module: 2.07 GW (2014) 930 MW (2015) 2.30 GW (2015)

? Hanwha Chemical owns 100% ? Hanwha Chemical is the largest Major of Q CELLS(3) shareholder with 45.7% ownership(3) Shareholders ? Acquisition of company / assets in 2012 ? Purchase of stake in 2010

(1) Based on unaudited financial information for each of SolarOne and Q CELLS for the six months ended June 30, 2014 (2) Before elimination of revenues, $49mm, from inter-company transactions between Q CELLS and SolarOne (3) Ownership through HSH, a wholly owned subsidiary of Hanwha Chemical

8

---

 

Table of Contents

Section I. Transaction Overview 6 Section II. Q CELLS, Industry Pioneer 11 Section III. Deal Rationale 17

Section IV. Hanwha Group, 27 Strong Commitment in Solar

9

---

 

Q CELLS: Technology Leadership

Quality-Driven DNA

Solar Pioneer founded in 1999 built on relentless pursuit of Quality

Globally Recognized

leader in quality & premium brand

Engineered in Germany

Over 200

researchers and engineers in Germany

R&D Cooperation

with leading German institutes

Proprietary Technologies

Q.ANTUM Technology

enabling 19.5% multi cell efficiency in commercial production

Over 270

granted and pending IPs

Innovative Solutions

differentiating itself from competition

Tra.Q TM forgery traceability protection & Dark Poly

10

---

 

Q CELLS: World’s Most Efficient, Fully Commercialized Multi PERC(1) Cell

World’s most efficient, mass production scale commercialized multi PERC(1) cell

? 2012: Successful pilot production in Germany

? 2014: High-volume commercial production in Germany ? Mid 2015: Planned mass production in Malaysia

CELL EFFICIENCY ROADMAP (IN %)

22.0 21.5 Q.antum mono

21.0

21.0 20.5 Avg. Industry mono p-type(2)

20.0

19.8 Q.antum multi

19.0 19.5

19.1

18.7 Avg. Industry

18.0 multi BSF(2)(3)

17.0

2014 2015E 2016E 2017E

(1) PERC: Passivated Emitter Rear Contact (2) ITRPV Report (Mar 2014) (3) BSF: Back Surface Field

11

---

 

Q CELLS: World’s Leading Cell Cost Structure

ALL-IN CELL MANUFACTURING COST

Q CELLS MALAYSIA CELL PLANT (in US$/W)

? Industry’s leading all-in cell mfg. cost $0.40 $0.35

? Fully exempt from anti-dumping policies $0.30 in US and EU $0.29 $0.29 $0.20

? Fully automated, scalable modern production site

? Primary location of new capacity addition $0.10 (800MW FAB in construction) $-

(1)

Q CELLS, Malaysia Chinese Tier-1

ADVANTAGES OF Q CELLS MALAYSIA

As of Labor Turnover (3) Multi Cell Efficiency (2) Unit Labor Cost Dec 2014 Rate

Q CELLS, 17.8—18.0% (BSF) (4)

1.2% / mo 0.45 $cents / W Malaysia 18.5—19.1% (Q.antum)

SolarOne,

±17.6% (BSF)(4) ~10% / mo 1.0—1.2 $cents / W China

(1) Source: Company filings, investor presentations & brokerage reports (2) Internal figures and analysis (3) Total direct mfg. labor ? total cell produced, Jan-Sep 2014 (4) BSF: Back Surface Field

12

---

 

Q CELLS: Full Turn-Key Project Execution Capabilities

? >700MW delivered since 2007 ? Highly disciplined “quality-gate”

? >455MW in O&M(1) services based processes ? >$1.0 bn investment facilitated since 2007 ? IRR maximization focus

PROJECT PROJECT PROJECT DEVELOPMENT IMPLEMENTATION OPERATION

? Cost-benefit analysis ? Careful selection of state-? Asset management ? Site assessment of-the-art components ? Operations & ? Planning and verification ? Design, optimization, and Maintenance of all official permits detailed planning ? Ongoing monitoring and ? Construction reporting of system ? Financing performance ? Turnkey solution

(1) O&M: Operations & Maintenance

13

---

 

Table of Contents

Section I. Transaction Overview 6

Section II. Q CELLS, Industry Pioneer 11

Section III. Deal Rationale 17

Section IV. Hanwha Group, 27 Strong Commitment in Solar

14

---

 

Compelling Deal Rationale

1

Industry Leading Scale w. Differentiated Global Footprint

2

Complementary Positioning in Key Global Markets

3

New Growth through Accelerating Downstream

4

Long Term Value Creation through LCOE(1)-driven Products

5

Revenue and Cost Synergy Opportunities

(1) LCOE: Levelized Cost of Energy

15

---

 

1 Industry Leading Scale w. Differentiated Global Footprint

Creates World’s Largest Cell Manufacturer

WORLD’S TOP PV CELL MANUFACTURERS(1)

(RANKED BY 2014E CAPACITY IN GW)

3.28

3.19

3.00

2.80

2.00 2.00

1.58

1.30

0.80

0.24

+

(1) Source: Company filings, investor presentation & brokerage reports

16

---

 

1 Industry Leading Scale w. Differentiated Global Footprint

? 3.28 GW cell and 3.23 GW(1) module manufacturing capacity

? Highly competitive position to supply cell and module free from anti-dumping uncertainties

GLOBAL MANUFACTURING CAPACITY OVERVIEW OF MANUFACTURING FACILITIES

3,500 3.28 GW 3.23 GW

Thalheim, Germany Qidong, China

230

3,000 230MW Cell 1,750 MW Cell 130MW Module 2,070 MW Module

2,500

1,750

2,000 2,070

1,500

Eumseong, Korea

1,000

1,300 230 MW Module

(planned perational

500 800

Cyberjaya, Malaysia in mid 2015)

230 130 1,300 MW Cell

-

(1) 800MW Module (planned operational in

Cell Module

late 2015)

Germany Malaysia China Korea

(1) Includes 2015 announced module capacity expansion of 230MW in Korea and 800MW in Malaysia

17

---

 

2 Complementary Positioning in Key Global Market

MARKET SIZE(1) +

2014-16E

(GW) CAGR

17.1

13.5 Access to

China SolarOne provides Q CELLS with World’s opportunity for immediate Largest market entry into China Market

2014E 2016E

(GW)

No. 1(2) 13.9 Foreign

Japan 11.1

Highly competitive in large Supplier Highly competitive in premium utility scale segment with >8%(3) resident and commercial sector combined

2014E 2016E M/S

(GW)

11.8

Minimizing 1.5 GW cell and 0.9 GW module (4) 6.1 230MW module facility in Korea impact US manufacturing facilities in Malaysia becoming operational in 2015 from policy and Germany offer unique advantage uncertainty

2014E 2016E

EU (GW)

No. 1

European Q CELLS’ pioneering, distinctive

5.2 6.2

PV presence in Europe with its strong company brand and history in the region with scale

2014E 2016E

(1) Source: BNEF, company analysis | (2) Source: SOLVISTO, 2013 | (3) company analysis | (4) including 800MW module facility planned for opening in 2015

18

---

 

3 New Growth through Accelerating Downstream

? 2.17 GW(1) of diversified downstream pipeline across multiple regions and stages

? New Growth Driver by expanding into downstream and diversifying / increasing revenue base

LATE-STAGE PROJECTS HIGHLIGHTS

LTAM

7% LOCATION SIZE COD

NA

Early

8% Late Japan 24.4 MW 1Q15

Stage

Stage 51%

China 30% UK 20.5 MW 1Q15

10%

By Region By Stage UK 23.8 MW 1Q15

EMEA

2,167MW(1) 2,167MW(1) Chile 2.8 MW 1Q15

Japan 51%

11% Korea 2.7 MW 1Q15 Mid Turkey 15.0 MW 2Q15

APAC Stage

13% 19% Mexico 28.0 MW 3Q15 Panama 11.6 MW 3Q15

(1) Including both 1,049 MW under direct control by Combined Company and 1,117 MW under partnership with Hanwha affiliated companies

19

---

 

3 New Growth through Accelerating Downstream (Cont’d)

? Proven Execution Record of >700MW Projects Installed Globally

Brandenburg-Briest, Germany INSTALLATION HIGHLIGHTS (91MW, Dec 2011 COD)

91MW Briest, Germany 46MW Zerbst, Germany 33.6MW, Arnedo, Spain 30MW, Rovigo, Italy

12MW, Basilicata, Italy

Indiana, USA

(11MW, Apr 2014 COD) 17.8MW Montemoro Novo, Portugal 4.5MW, Le Castellet, France

12MW, Sault Ste. Marie, Canada

11MW, Indiana, USA

5MW, Hawaii, USA Hawaii, USA 2MW, Tokushima, Japan

(5MW, Nov 2013 COD)

20

---

 

4 Long Term Value Creation through LCOE-driven Products

? Focus on delivering system solution with LCOE(1)-driven products that maximizes return on investments for customers.

Leveraging Q CELLS’ high efficiency/power products and long-term quality

Transferring highly cost competitive manufacturing knowhow globally

kWh

TECHNOLOGY LEADERSHIP

PERFORMANCE SYSTEM

& RELIABILITY MANUFACTURING COST

KNOWHOW

$$

(1) LCOE: Levelized Cost of Energy

21

---

 

5 Revenue and Cost Synergy Opportunities

Near term OPEX synergies expected to be $10 mil per annum

OPEX SYNERGIES CAPEX / FINANCING REVENUE SYNERGIES

? Improvement of supply ? Centralized CAPEX ? Revenue growth from chain and procurement spending and to facilitate expansion into efficiencies on greater improved ROIC downstream economies of scale ? Broader universe of ? Enhanced sales / ? Enhancement of financing options due to marketing capabilities suboptimal operations improved post merger with complimentary capitalization market penetration ? Integration of regional sales and service ? Higher ASPs through operations higher quality R&D, premium products and improved marketing

22

---

 

Table of Contents

Section I. Transaction Overview 6 Section II. Q CELLS, Industry Pioneer 11 Section III. Deal Rationale 17

Section IV. Hanwha Group, 27

Strong Commitment in Solar

23

---

 

Hanwha Group at a Glance

? Founded in 1952 ? Total Assets: $114.5 bn(1)

? Korea’s 9th largest conglomerate ? Total Revenue: $36.1 bn(1)

? #331 ranked in

1964 ~ 1980 2000 ~ 2006

Focused on key industries materials, Expanded construction, our advanced and chemicals, financial

Supported Korea’s modernization services businesses Laid core the growth foundation businesses for

1952 ~ 1963 1981 ~ 1999 2007~ Present

Founded as Korea Explosives Advanced into finance, Securing solar new growth energy engines and finance like Powered Korea’s leisure, distribution, services and economic growth Building a sustainable future Became leading one companies of Korea’s

(1) Based on trailing twelve months ended 9/30/14, based on KRW/USD of 1,046.24

24

---

 

Hanwha Group: Strong Commitment in Solar

? Following equity stake acquisition in Hanwha SolarOne in 2010 and acquisition of Hanwha Q CELLS in 2012, Hanwha Group has been actively and strategically aligning its resources to enhance collective competencies in solar industry.

COMBINED COMPANY

25

---

 

THANK YOU!

TOP-TIER QUALITY & TECHNOLOGY

Global leaders in the photovolatics industry: &

Global photovoltaic R&D and engineering centers in Germany, Korea, China, Malaysia

GLOBAL LEADER

World’s largest solar cell capacity at 3.28GW

&

SOLAR VALUE CHAIN INTEGRATION

Actively and strategically aligning group’s resources to enhance collective competencies in solar industry

Exhibit 99.2

Hanwha SolarOne / Q CELLS Announcement

FREQUENTLY ASKED QUESTIONS

For the Financial Community

 

1.	What’s the rationale for the combination?

 

-

The combination creates a new leader in solar power with a solar cell production capacity of 3.28 gigawatts.

 

-

We believe combined global scale will allow us to increase our competitiveness, increase efficiency, reduce manufacturing costs and improve our growth profile in key markets.

 

-

The combination of our complementary businesses is expected to unlock revenue and cost synergies.

 

-

We will have a diverse manufacturing footprint in Malaysia, Germany, China in Korea (2015) that provides more flexibility and efficiency, including US and EU access without incurring anti-dumping and countervailing duties.

 

-

We plan to leverage Q CELLS’ deep expertise in producing high quality, high performance, and premium products across the combined company.

 

-

We will be able to expand our presence into downstream more quickly and in more markets, which is an important area for growth.

 

2.	How did the deal come about?

 

-

Given the strong strategic fit and complementary benefits that each company can bring to the table, the SolarOne board and management formally approached Q CELLS in late August of this year to initiate discussions regarding a potential transaction.

 

-

Upon extensive due diligence from both parties together with financial and legal advisors from each side, SolarOne and Q CELLS came to a mutual agreement that the combination would be in the best interest of both companies’ shareholders, employees and long-term strategy.

 

-

SolarOne’s board of directors, acting upon the unanimous recommendation of an independent special committee formed by the board of directors (which was advised by independent legal and financial advisors), approved the transaction and resolved to recommend that SolarOne’s shareholders vote to approve the transaction.

 

3.	Why does the board and management believe that this transaction maximizes SolarOne’s shareholder value?

 

-

SolarOne’s management and board are committed to maximizing value for all shareholders.

 

-

As such, the Board carefully considered the proposed combination, along with other strategic alternatives, together with our financial and legal advisors. Following extensive due diligence and negotiations with Q CELLS, the board concluded that this transaction is in the best interest of all shareholders.

 

-

SolarOne’s board of directors, acting upon the unanimous recommendation of an independent special committee formed by the board of directors (which was advised by independent legal and financial advisors), approved the transaction and resolved to recommend that SolarOne’s shareholders vote to approve the transaction.

 

-

As discussed in the presentation, both companies firmly believe that the combination and integration of the two businesses will provide significant strategic and financial benefits to all constituents given the complementary attributes of both companies along with the significant synergy opportunities unlocked through the combination.

 

4.	What revenue and cost efficiencies do you expect to achieve?

 

-

Operating expenditure savings are expected through:

 

•

Significant supply chain and procurement efficiencies as a result of greater economies of scale

 

1

---

•

Optimization of suboptimal operations

 

•

Integration of regional sales and services operations

 

-

Capital expenditure savings are expected through centralization of capex spending to facilitate improved ROIC.

 

-

Financing savings are expected through accessing a broader universe of financing options as a result of a better credit profile and stronger capital structure.

 

-

We expect these efficiencies to generate $10 million in OPEX savings per annum.

 

-

Post integration, revenue synergies are expected on several fronts, driven by:

 

•

More profitable revenue mix enabled by accelerating our downstream business,

 

•

Enhanced sales and marketing capabilities with complementary market penetration, and

 

•

We also believe higher ASPs will be possible through higher quality R&D, products, go-to-market branding.

 

5.	What will be the financial profile of the combined company?

 

-

The deal will vastly enhance our financial strength and provide us with greater flexibility to invest in the current business and future growth opportunities.

 

-

Based on the unaudited financial information for each of SolarOne and Q CELLS for the six months ended June 30, 2014 (and after adjusting for approximately $49 million of intercompany transactions), the total revenue for the two companies was approximately $733 million.

 

6.	When do you anticipate deal closing?

 

-

We anticipate closing in the first quarter of 2015, subject to shareholders approval and regulatory and other customary closing conditions.

 

7.	What is the proposed deal structure?

 

-

SolarOne will acquire Q CELLS in an all-stock transaction that values the combined company at approximately $2.0 billion on an enterprise value basis, based on SolarOne’s closing share price on December 5, 2013.

 

-

SolarOne will issue approximately 3.7 billion SolarOne ordinary shares (being the equivalent of approximately 740.2 million American depositary shares), equivalent to approximately 8.09 newly issued shares for each of its currently outstanding shares, on a fully diluted basis to, Hanwha Solar Holdings Co., Ltd. (“HSH”) Q CELLS shareholder.

 

-

Q CELLS’ shareholder, HSH, which currently holds an approximately 45.7% stake in SolarOne will own approximately 94% of the combined company while non-HSH SolarOne shareholders will retain approximately 6% of the combined company.

 

8.	What is the value of the acquisition?

 

-

Based on the closing price of SolarOne’s ADRs as of December 5, 2014 (the last trading day prior to the public announcement of the transaction) and the exchange ratio, the implied equity value of Q CELLS is approximately $1.2 billion.

 

9.	How did the two companies determine the exchange ratio?

 

-

Throughout the entire due diligence process, each party spent a considerable amount of time to thoroughly understand each other’s business, operations and financial outlook.

 

-

Both companies conducted detailed due diligence based on multiple valuation methodologies to derive the fair value of both companies.

 

-

Based on these assessments, both companies held multiple rounds of negotiation sessions to derive a mutually agreeable ratio that were approved by both parties.

 

2

---

-

Each of the companies, as well as the special committee of SolarOne, received assistance from legal and financial advisors independent of each other.

 

-

Further details as they relate to the valuation and ratio will be made available in the shareholder circular.

 

10.	What are the company’s capital raise plans following the merger?

 

-

At this stage, nothing specific is planned; we will continue to evaluate opportunities to optimize our capital structure.

 

-

We believe the combination will result in a new company with an enhanced leverage profile and enlarged scale that should enable us to consider a broader array of funding options.

 

-

Regardless, we are committed to maintaining a disciplined leverage profile in line with our industry and employ an efficient and balanced capital allocation strategy.

 

11.	Is the deal accretive?

 

-

We expect the combination to be accretive to earnings. The statement that the combination is earning accretive should not be interpreted to mean that the earnings per share in any future financial period will necessarily match or be greater than those for the relevant preceding financial period.

 

12.	Why is shareholder approval required for the deal?

 

-

As a foreign private issuer, we have opted out of and are not subject to the NASDAQ listing rule, that requires shareholder approval prior to any issuance or sale of common stock in any transaction if the number of shares of common stock issued equals or exceeds 20% of the number of shares of common stock outstanding prior to the issuance.

 

-

Nevertheless, we are voluntarily seeking shareholder approval for this transaction.

 

-

In addition, Cayman law requires shareholder approval for certain corporate actions relating to the transaction, including the increase in SolarOne’s authorized capital.

 

13.	Are there any conditions, third party or regulatory approvals that need to be fulfilled pre closing?

 

-

In addition to shareholder approval, completion of the transaction will be subject to customary conditions, such as regulatory approvals.

 

-

The parties believe they are only required to make a merger control filing in Japan.

 

14.	Are there any break-up fees?

 

-

No, there are no break-up fees if the transaction is not consummated.

 

15.	Are there any merger-related charges involved with the transaction?

 

-

There will be some moderate costs associated with post merger integration, but it is too early to speculate further on details of their financial impact.

 

16.	Will Hanwha Chemical Corp. remain a strategic investor going forward? What percent of the combined company will it own?

 

-

Yes. Hanwha Chemical, the sole shareholder of HSH is committed to the growth and future of this company, as well as the growth and future of the solar sector overall. Hanwha Chemical, through HSH, is expected to own approximately 94% of the combined company, immediately after closing.

 

17.	Does this deal include Hanwha Q CELLS Japan, Korea or US?

 

-

No, the deal only involves the Hanwha Q CELLS Investment entity and its subsidiaries.

 

-

Hanwha Q CELLS Japan, Korea and US are not within the scope of this transaction and have no direct affiliations with Hanwha Q CELLS Investment.

 

3

---

18.	Will you look to acquire any other Hanwha Q CELLS entities? Other acquisitions in general?

 

-

We are evaluating our options in this regard.

 

-

We are always open to opportunities that deliver value for our shareholders, but we have no immediate plans for future acquisitions.

 

19.	Please discuss the company’s plan as it relates to the outstanding convertible bonds maturing in January 2015 in the context of the proposed combination?

 

-

We are currently evaluating our options. We have nothing to disclose at this time.

 

20.	What will be the combined production capacity?

 

-

3.28 gigawatt cell capacity

 

-

2.2 gigawatt module capacity, with an additional 1 gigawatt capacity coming online in 2015

 

21.	What will be the combined company’s business focus?

 

-

The combined company plans to continue to focus on enhancing its market position in the midstream segment leveraging its larger scale in cell / module manufacturing and enhanced R&D capabilities while further reducing costs through operational efficiencies.

 

-

In addition, the company plans to accelerate expansion into the downstream business by leveraging its combined 2.17 gigawatts of downstream pipeline and established track record in strategically important and rapidly growing downstream markets.

 

-

Lastly, we will work diligently to smoothly and swiftly integrate the two companies to ensure disruption-free operations while harnessing synergies arising from the combination.

 

22.	Which markets will you be focusing on?

 

-

Through the combination, we will be in a fortunate position in the largest solar markets of China, Japan, US and Europe.

 

-

As such, we plan on expanding our presence in these strategically important markets leveraging our current customer base and sales network.

 

-

We also intend to continue to do business in other markets where we are already present.

 

-

At the same time, we plan on selectively entering key large emerging solar markets such as the Middle East and Latin America leveraging our current foothold in these regions through our Q CELLS’ sales network.

 

23.	Will you invest in new markets or product segments?

 

-

We believe the combination will pave the way for vertical expansion into downstream.

 

-

SolarOne is already investing in a new manufacturing facility in Korea, which is obviously a market we know well. SolarOne will facilitate entry in China for Q CELLS.

 

-

We plan on selectively entering key large emerging solar markets such as the Middle East and Latin America leveraging our current network in these regions.

 

24.	How will this combination impact R&D strategy?

 

-

The combination will greatly enhance our R&D capabilities.

 

-

Q CELLS is widely recognized for its superior product performance and quality as well as R&D expertise with more than 200 researchers and engineers, and over 270 granted and pending patents.

 

4

---

25.	What’s your strategy for entering the downstream market?

 

-

Q CELLS brings significant expertise in development, EPC and project financing, and has successfully installed over 700 megawatts and facilitated over $1 billion investments worldwide since 2007.

 

-

The combined downstream portfolio will cover China through SolarOne, in addition to EMEA, LATAM and APAC through Q CELLS.

 

26.	Are the recently announced capacity expansion plans for Malaysia and Korea facilities proceeding as planned after the combination?

 

-

The Malaysia 800 megawatt and Korea 230 megawatt capacity expansion plans are an integral part of our long-term strategy to remain cost competitive through enlarged scale while further diversifying our non-China manufacturing capacity.

 

-

As such, we are proceeding with these capacity expansions as originally planned and currently do not envision any changes.

 

27.	Will you be combining or rationalizing product portfolios?

 

-

We intend to largely maintain our product offering to the market.

 

-

At the same time, we will be able to leverage Q CELLS’ deep expertise in producing high quality, premium products across the combined company.

 

28.	What is your integration plan?

 

-

SolarOne and Q CELLS are sister companies and share a common parent, so there is existing relationship and common culture that will facilitate a smooth integration.

 

-

The deal is not expected to close until Q1 of 2015 and integration will begin after that point.

 

-

It is too early to speculate further on details of the integration.

 

29.	Do you plan to change or restructure your cell or module manufacturing?

 

-

As always, we plan to optimize our existing facilities as well as expand our capacity.

 

-

There are no new plans to announce at this time.

 

30.	Do you plan to exit any markets?

 

-

No. On the contrary, this combination should allow us to accelerate our expansion in multiple international markets and expand further into new geographies over time.

 

31.	What will the brand be for the combined entity?

 

-

We anticipate announcing a new corporate brand after closing of the transaction (as opposed to the product brands which will remain the same for the foreseeable future).

 

32.	Will this combination allow you to reduce your manufacturing costs?

 

-

With Q CELLS, we will significantly increase our scale, which will allow us to increase efficiency and reduce manufacturing costs.

 

-

We plan to leverage SolarOne’s cost-efficient module manufacturing base as well as Q CELLS’ highly efficient and fully automated cell manufacturing base to further improve our combined cost competitiveness.

 

33.	How much customer overlap currently exists?

 

-

SolarOne and Q CELLS currently have very minimal overlapping customers given the different focus in terms of geography and product segment. As such, we do not foresee material loss of customers or dis-synergies as a result of the combination.

 

5

---

Safe-Harbor Statement

This document contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the quotations from management in this document and SolarOne’s operations and business outlook, contain forward-looking statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These risks and uncertainties include, among others, the timing to consummate the transaction; the risk that a condition to the closing of the transaction may not be satisfied; the risk that shareholder and any required regulatory or other approvals for the transaction are not obtained, are delayed or are subject to conditions that are not anticipated; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of SolarOne and Q CELLS; the risk that expected synergies and other benefits from the transaction may not be realized; and the impact of any litigation and regulatory proceedings. Further information regarding these and other risks is included in SolarOne’s filings with the SEC, including its annual report on Form 20-F. Except as required by law, SolarOne does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Additional Information about the Transaction

The total revenue for SolarOne and Q CELLS for the six month period ended June 30, 2014 set out above does not constitute pro forma financial information and is not necessarily indicative of or intended to represent the results that would have been achieved had the transaction been consummated as of January 1, 2014 or that may be achieved in the future.

In connection with the transaction described in this announcement (the “Transaction”), SolarOne will furnish to the U.S. Securities and Exchange Commission (the “SEC”) a report on Form 6-K regarding the Transaction, which will include as exhibits thereto the share purchase agreement, dated December 8, 2014, among SolarOne, Q CELLS and HSH and a new shareholder agreement, dated December 8, 2014, between SolarOne and HSH that will, upon consummation of the Transaction, replace and terminate the existing Shareholders Agreement, dated September 16, 2010, by and between SolarOne and HSH, as amended by Amendment No. 1, dated November 12, 2013. All parties desiring details regarding the Transaction are urged to review these documents, which will be available at the SEC’s website (http://www.sec.gov).

In connection with the Transaction, SolarOne will prepare and mail a shareholder circular to its shareholders, which will be filed with or furnished to the SEC. INVESTORS AND SHAREHOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE SHAREHOLDER CIRCULAR AND OTHER MATERIALS FILED WITH OR FURNISHED TO THE SEC WHEN THEY BECOME AVAILABLE, AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION AND RELATED MATTERS. Investors and security holders may obtain a free copy of the shareholder circular and other documents that SolarOne prepares and mails to its shareholders on SolarOne’s website at www.hanwha-solarone.com. In addition, these documents can be obtained, without charge, by contacting SolarOne at the Investor Relations contact provided below.

This announcement is neither a solicitation of proxies, an offer to purchase nor a solicitation of an offer to sell any securities.

SOURCE Hanwha SolarOne Co., Ltd.

# # #

 

6