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Energy

Suntech Power Hikes Raised Funds in Convertible Offering (STP)

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By Douglas A. McIntyre Published
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Suntech Power Holdings Co., Ltd. (NYSE: STP) has priced $500 million of 3.00% Convertible Senior Notes that are due in 2013 in a private offering to qualified institutional buyers. What is interesting about the capital raise besides the expansion it will see, is that the original amount to be raised was $425 million and this pricing is for $500 million.  The conversion rate also seems fairly cheap when you consider the performance of this one and where it has traded before.

There is also an additional $75 million that can be used for over-allotments. The initial conversion rate is subject to adjustment, but it is 24.3153 ADS per $1,000.  This represents an initial conversion price of approximately $41.13 per ADS). The sale of the notes is expected to close on March 17, 2008.  This one closed at $30.24 yesterday, and the 52-week trading range is $28.91 to $90.00.

Suntech will use about $300 million in proceeds for procuring upstream supplies, the balance for production capacity expansion, and new technology commercialization.

One call we have seen for this one was a call out of Lazard Capital, who has maintained a Buy rating with a $90 target.

Jon C. Ogg
March 12, 2008

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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