The two million shares acquired by Solar EnerTech constitute approximately 7.8% of 21-Century Silicon’s outstanding equity. The equity purchase agreement further provides that the company would acquire an additional two million shares upon 21-Century Silicon meeting certain milestones.
Under the terms of this agreement, the company acquired two million shares of newly issued common stock at a purchase price of $0.50 per share, and would acquire an additional two million shares at the same per share price upon the first polysilicon shipment meeting the quality specifications determined solely by the company.
Related to the equity purchase agreement, the company has also signed a memorandum of understanding with 21-Century Silicon for a four-year supply framework agreement for polysilicon shipments. The first material polysilicon shipment from 21-Century Silicon is expected in the second quarter of 2009.
Leo Young, CEO of Solar EnerTech, said: Our relationship with 21-Century is a positive development for our business and further increases the visibility of our production supply. We are pleased to take this first step towards vertical integration with this agreement, and at the same time, to secure a polysilicon supply source at a time when demand and prices remain high.
