BOSTON, Dec. 19, 2017 (GLOBE NEWSWIRE) -- Esplanade Capital LLC, a significant shareholder of New Energy Exchange Limited (OTC:EBODF), announced today that it has issued a letter to the Board of Directors (the “Board”) urging the Company to pursue shareholder value maximizing actions, namely exchanging EBODF shares for a pro rata allocation of the Company’s 320,683,070 shares of Panda Green Energy Group Limited (HKSE:686). At a ratio of 142.5 shares of 686 HK for each share of EBODF (“Exchange Ratio”), the exchange would provide ~US$18.00 of value per EBODF share versus the current market price of US$2.01 per share. The full text of the letter follows:
December 19, 2017
New Energy Exchange Limited
Board of Directors
Shun Tak Centre West Tower
168-200 Connaught Road
Central, Hong Kong
Dear Members of the Board of Directors (the “Board”):
Esplanade Capital LLC (“Esplanade” or “We”) urges New Energy Exchange Limited (the “Company”, “NEX”, or “EBODF”) to pursue shareholder value maximizing actions, namely exchanging (“Exchange Offer”) EBODF shares for a pro rata allocation of the Company’s 320,683,070 shares of Panda Green Energy Group Limited (HKSE:686), validated through Stock Exchange of Hong Kong Limited filings as of September 18, 2017.
At a ratio of 142.5 shares of 686 HK for each share of EBODF (“Exchange Ratio”), the exchange would provide ~US$18.00 of value per EBODF share versus the current market price of US$2.01 per share.
As background, Esplanade was founded in 1999 and has been investing in the solar sector since 2004. Through the management of Esplanade Capital Partners I LLC and Esplanade Capital Electron Partners LP, We and our affiliates have maintained a significant position in EBODF since 2013.
Discussions with the Company before and after Esplanade’s April 26, 2017 and August 28, 2017 open letters to the Board have provided a more robust appreciation for its current business operations: the provision of value-added transaction services on the buy- and sell-side in the booming Chinese downstream solar market and solar power plant asset ownership. Moreover in our follow up to these discussions, we have provided 686 HK and its parent State Owned Enterprise China Merchants New Energy Group introductions to our deep industry network facilitating opportunities to grow their pipeline of US solar asset acquisition targets. However despite these productive conversations, we remain unsatisfied with the Company’s rationale for inaction in terms of maximizing value for EBODF shareholders.
In light of this, we are proposing this Exchange Offer to create value for EBODF shareholders while also enhancing management’s position. EBODF holders would benefit as they realize substantial, even if not full, value for their shares. EBODF management would benefit as they retain control of the Company and effectively privatize EBODF financed through their stake in 686 HK. After the Exchange Offer, EBODF management will own 100% of EBODF shares and can pursue their strategy without the hassle and expense of an US public listing.
Esplanade’s proposed Exchange Offer would enable EBODF to follow in the footsteps of its US-listed Chinese solar peers if it so chooses. In 2017 alone, three (3) bellwether US-listed Chinese solar companies completed or announced “going private” transactions intending to relist on China exchanges which reward solar companies with more generous valuations. Trina Solar Limited completed a “going private” transaction on March 13, 2017; JA Solar Holdings Co. Ltd. entered into a definitive agreement for a “going private” transaction on November 17, 2017; and Canadian Solar Inc. announced the receipt of a “going private” proposal from its Chairman on December 11, 2017.
As a sign of good faith, Esplanade commits to tender their significant stake in EBODF at the Exchange Ratio cited above.
We look forward to discussing our proposal with the Company.
Shawn W. Kravetz
cc: Alan Li Shan Yuan (electronically), Maggie Qiu Ping (electronically), Lu Zhenwei (electronically), Li Hong (electronically)
ABOUT ESPLANADE CAPITAL LLC
Esplanade Capital is a Boston based investment management firm founded in 1999 to manage capital for a small number of like-minded families, private investors, and institutions.
Esplanade Capital LLC