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Bruised by Wall Street – but Trina Solar could go public again

Wall Street's rough treatment of solar stocks led China's Trina Solar to accept a deal taking it private, the company tells Recharge, although it may look to re-enter the public markets in the future.

In late 2015 Trina, the world's largest supplier of PV modules, received a go-private bid valuing it at $1.1bn from a group of investors including chairman and chief executive Jifan Gao.

Last month Trina accepted the all-cash deal, which is expected to close in early 2017. Its shares will be de-listed from the New York Stock Exchange.

"The motivation behind the privatisation is the market valuation of the company," Jing Tian, Trina's San Francisco-based global head of marketing, explained in an interview on the sidelines of Solar Power International.

"It's no secret that Wall Street hasn't been very kind to solar companies," she said. "For us, looking at the market's growth, and looking at what we want to focus on, we think it's better for us to go private. That will allow us to raise the necessary capital for us to expand and grow as a company."

Trina, which is profitable, may remain private or may go public again one day if investor sentiment towards solar changes, Tian says. The company may also choose to list shares in China.  

"All of those are possibilities. It will have to play out depending on how the industry evolves."

Changzhou-based Trina is one of many Chinese solar manufacturers to have gone public on US exchanges in the 2005-2010 period, starting with Suntech Power's red-hot December 2005 initial public offering, which saw its shares rise 41% in their first day of trading.

Other US-listed Chinese solar companies include JinkoSolar, Yingli, JA Solar and Renesola. But over the years the public equity markets have not been kind to China's solar giants – or, for that matter, many of their Western rivals.

Trina held its IPO in New York in December 2006, and within six months its stock price had nearly doubled. But the shares have had a rocky ride in the years since, buffeted by policy shifts in key markets and repeated periods of oversupply in the global module market.

Trina went public at $18.50 a share; now, a decade later, Gao and the other investors will take the company private for $11.60 a share.

Far from seeing more Chinese renewables companies listing shares in the US, the trend appears to be heading in reverse. In June, Chinese wind turbine maker Ming Yang de-listed from the New York Stock Exchange, and JA Solar is also subject to a go-private bid.  

Despite widely held optimism about the future of solar energy, many of the industry's leading companies are suffering in the public markets and may be vulnerable to takeover offers, including from private-equity investors, as former NRG Energy chief executive David Crane said this week.

Trina Solar's global base of customers will not notice much difference in the company after it has gone private, Tian says.

"We are committed to maintaining transparency," she says. "We understand that bankability is one of the keys for a lot of customers who buy Trina modules, so we will remain very transparent with our customers."

Trina intends to remain one of the world's largest module suppliers under private ownership, and within a few years it will likely have a few other businesses "becoming noticeable" in the global clean-energy industry, Tian says.

These could include storage and downstream project development, she says, both areas where the company is already active today.

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