Sky Solar Holdings, Ltd. today announced its intention to enter the Chinese solar market. Sky Solar believes that the country is a high-priority growth opportunity due to its large size and rapidly growing renewable energy sector, as well as the Company's own extensive knowledge of the market.
The Company intends to own fully operational solar assets, as well as build and transfer assets to external third parties which are mainly state-owned conglomerates and public companies. The Company has always planned to target selective provinces with large imbalances between power supply and demand, as well as the most attractive financial strength, based on the ability to make timely payments of feed-in-tariffs.
Pursuant to the Company's Corporate Governance Guidelines, a majority of the Company's directors, including all of the Company's independent directors, must approve any acquisition of businesses, solar parks or other assets from related parties or independent third parties. All approvals are based on a myriad of factors including but not limited to IRR, technical specifications of the solar project (including sun irradiation hours, components and performance guarantees) and technical, financial and legal due diligence. The Company believes that these strong internal controls ensure that any related-party transaction will occur at a fair market price. In addition, under the Company's Corporate Governance Guidelines, two-thirds of all shareholders must also approve certain purchases from related parties that are individually or in the aggregate over the last twelve months equivalent to 20% or more of the Company's market capitalization.
The Company is also establishing a new business platform, to be named "Sky-Link", for integrating supply-chain and industry data and analysis, and standardizing solar project quality control and monitoring. The Company will use these capabilities internally as well as offer the services to third parties for a fee. The Company is evaluating a potential acquisition of Changzhou Sky Solar New Energy Technology Co., Ltd. ("Changzhou Sky Solar New Energy Technology") at fair market value by Sky-Link, in order to quickly enter the solar project quality control and monitoring business. Changzhou Sky Solar New Energy Technology is a well-established vendor of services including (i) PV materials, products and plants testing, (ii) project acceptance inspections, and (iii) solar project supervision. Changzhou Sky Solar New Energy Technology is a related entity controlled by the Company's Chairman Mr. Su, and accordingly the acquisition would be need to be approved under the Company's strict Corporate Governance Guidelines.
The Company is currently pursuing a number of financing alternatives to implement the proposed transactions associated with this strategic initiative.