Canadian Solar: Q4 results and concurrent offerings of common shares and convertible senior notes
Guelph, Canada - Canadian Solar Inc. announced selective preliminary results for the fourth quarter ended on December 31, 2013. The company also announced that it priced the offering of 2,778,000 common shares of the Company, with no par value, at US$36.00 per common share.
For the fourth quarter of 2013, Canadian Solar expects solar module shipments to be in the range of approximately 605 MW to 620 MW, which exceeds the Company's original guidance of 480 MW to 500 MW provided on November 13, 2013. For the fiscal year 2013 solar module shipments are expected to be in the range of 1,878 MW to 1,893 MW. The Company expects its revenue for the fourth quarter of 2013 to be in the range of $510 million to $520 million. The Company expects its gross margin for the fourth quarter of 2013 including the sale of the Mississippi Mills project in Ontario, Canada, to be in the range of 16% to 18%, compared to its original guidance of 13% to 15% which did not factor in the potential sales of projects from its Ontario, Canada pipeline.
For the three-month period as well as for the twelve-month period ended on December 31, 2013 the Company expects to be profitable at the net-income level on a US-GAAP basis.
Management's expectations in respect to profitability in the fourth quarter and the fiscal year 2013 are subject to the final ruling by the Suzhou Intermediate Court on a contract dispute between Canadian Solar and LDK as previously disclosed. If the court were to rule against Canadian Solar and order the Company to pay the award to LDK, Canadian Solar may have to make a provision for the fourth quarter of 2013 and the full year of 2013, which would impact the Company's profitability.
The Notes will be convertible into Common Shares at an initial conversion rate of 22.2222 Common Shares per US$1,000 principal amount of the Notes (equivalent to an initial conversion price of approximately US$45.00 per Common Share), subject to adjustments under certain circumstances. The initial conversion price for the Notes represents an approximately 25.0% conversion premium over the Common Shares Offering price of US$36.00 per Common Share. The Notes will accrue interest at an annual rate of 4.25%. Interest on the Notes will be payable semi-annually in arrears on February 15 and August 15 of each year, beginning August 15, 2014. The Notes will mature on February 15, 2019, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date.
Canadian Solar intends to use the net proceeds from these offerings for general corporate purposes, which may include expanding manufacturing capacity, the development of solar power projects and working capital. The Company's management will retain broad discretion over the use of proceeds, and may ultimately use the proceeds for different purposes than what is currently intended. Pending any ultimate use of any portion of the proceeds from these offerings, Canadian Solar intends to invest the net proceeds in short-term, marketable instruments.
Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, and Nomura Securities International, Inc. are acting as joint book-running managers for the Common Shares Offering. Roth Capital Partners and Northland Securities, Inc. are acting as co-managers for the Common Shares Offering. Canadian Solar has granted the underwriters in the Common Shares Offering a 30-day option to purchase up to an additional 416,700 Common Shares in connection with the Common Shares Offering to cover over-allotments and the initial purchasers in the Notes Offering a 30-day option to purchase up to an additional US$20 million aggregate principal amount of the Notes.
Source: IWR Online, 12 Feb 2014
