Sunpower of Singapore gained 90 percent of shares in Changshu Suyuan of China through a $41.5 million investment deal. Sunpower is an environmental protection firm listed in Singapore. Details of the deal were released in a press statement.
Changshu Suyuan Thermal Power Company is the sole steam supplier to the Changshu City of Suzhou. This region has been the chief producer of garments and textiles for the past four decades in China. Industries in the area account for at least 100 billion yuan in aggregate revenue each year.
The acquisition will bolster Sunpower’s cashflow and long-term income. It is forecasted that the demand for steam and electrical power generated by Changshu Suyuan Thermal Power Company will increase significantly once the state policies for the enhancement of efficiencies of boilers goes into effect in 2020.
It is also projected that several dying and printing companies from adjacent areas will transfer to the region covered by Changshu Suyuan.
According to the executive chairman Guo Hongxin, the latest financial deal is part of Sunpower’s strategy to expand its portfolio of valuable and environmentally-friendly power generating assets. The company expects to receive a boost in the net present value of cashflows in the future. This investment is expected to yield double digit returns on investment.
After the completion of the latest financial transaction, the Singapore based company will have five assets in different stages of development and eight assets that are producing revenue. Guo stated that the company plans to take its investments to $2.5 billion by 2021.
The press statement further mentioned that Changshu Suyuan’s revenue has increased substantially over the past three years as a result of flourishing garment and textile industries in the region.
The strategic industrial importance of Suyuan Thermal can be determined from the fact that that it is located in a region with strong infrastructural that has accommodated 49 enterprises whose revenues have risen steadily during the past 3 years.
Sunpower will leverage its proprietary technology, management expertise and integrated capabilities to upgrade performance and efficiency of the Changshu power plant.
Guo Hongxin further stated that several more acquisitions are currently under consideration and they will be realized in the coming years. The chairman said that due to full support by shareholders, technological expertise and the unique business model, Sunpower is ready to enter its next stage of growth.
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