Semiconductor-based components and satellite solar panel developer Emcore Corp has agreed to sell its minority stake in Suncore Photovoltaic Technology to majority shareholder San’An Optoelectronics of China.
Under the terms of the transfer agreement,…
Semiconductor-based components and satellite solar panel developer Emcore Corp has agreed to sell its minority stake in Suncore Photovoltaic Technology to majority shareholder San’An Optoelectronics of China.
Under the terms of the transfer agreement, San’An agreed to pay Emcore an aggregate consideration of US$4.8m in cash for the 40% stake. Closing is subject to customary conditions, including Chinese regulatory approvals.
The exit is part of Emcore’s ongoing realignment strategy to focus on its core businesses in order to boost profitability. The company’s revenues were significantly hit by major flooding to its manufacturing facilities in Thailand in 2011.
Since then Emcore has sold its loss-making enterprise product lines, terrestrial concentrating photovoltaics (CPV) assets and most recently its Emcore Solar New Mexico subsidiary.
The latter two were sold to Suncore for US$2.8m in August 2012 and US$1.5m in March 2013 respectively.
Emcore also considered separating its core space photovoltaics and fibre optics businesses to become pure plays in their respective business segments but following the sale of its CPV business to Suncore decided against it.
The Suncore joint venture was formed in January 2011 for the purpose of developing and manufacturing CPV receivers, modules, and systems for terrestrial solar power applications under a technology licence from Emcore.
Since its inception Emcore has contributed US$12m in cash to Suncore as a capital contribution and received US$8.5m of consulting fees from an affiliate of San’an. Indeed, as of 31 March 2013, Emcore’s cumulative proportionate loss in Suncore has exceeded its net investment by approximately US$3.1m. As such, Emcore has valued its minority stake as US$0 on its balance sheet.
Prior to announcing the transfer agreement, Emcore revealed that it had entered into a US$22m supply contract with the Indian Space Research Organisation (ISRO) to manufacture, test, and deliver solar cell assemblies for ISRO’s commercial geostationary telecommunications and scientific earth observation satellite missions.
Speaking at a recent investor conference call, Emcore CEO Hong Hou said that the company was aggressively pursuing a number of similar deals with both governments and commercial satellite providers.
