Shares of Ascent Solar Technologies Inc. rose Monday after the company announced that an Asian joint venture had agreed to a partnership deal with Ascent worth about $440 million, plus royalties.
The deal gives the thin-film photovoltaics firm, whose work force has shrunk to roughly half what it was last year, a financing partner, a stronger presence in Asia, plus royalties while it works to improve its technology and build a next-generation photovoltaic production line in Colorado.
Thornton, Colo.-based Ascent said TFG Radiant Group's $275 million partnership deal included buying 6.4 million Ascent shares at $1.15 apiece, representing close to one-fifth of outstanding shares and a 56 percent premium over the closing price Friday. TFG Radiant could buy 9.5 million more shares, under certain conditions, for $1.55 per share. TFG Radiant has the right to appoint one member to Ascent's board with its initial stock purchase and could appoint another if it exercises its stock option.
Meanwhile Ascent agreed to exclusively license its technology for lightweight, flexible solar panels to TFG Radiant within China, Taiwan, Hong Kong, Malaysia, Indonesia, Thailand, Korea and Singapore. Ascent retains all rights for the rest of the world.
TFG Radiant plans to build a $165 million plant in China based on Ascent's technology, with Ascent receiving a stake in the plant, plus royalties from sales of what's produced there. TFG will cover Ascent's consulting costs on the plant and pay Ascent engineering fees. Ascent would receive partial ownership, royalties and consulting fees for any other plants TFG Radiant builds for East Asian markets.
Ascent also will receive nonrecurring engineering fees, plus milestone payments that could top $250 million over several years, if it reaches certain production and cost goals, the company said.
"Strategically, this type of partnership enables us to focus on (research and development), and product and plant development, while our partners focus on scale up, cost reduction and commercialization," Ascent Chairman Amit Kumar said in a written statement.
TFG Radiant Group is a joint venture of the Chinese construction and real estate conglomerate Radiant Group and the Singapore-based investment firm Tertius Financial Group. It has been Ascent's exclusive distributor in China for about a year.
Ascent shares closed at $1.21, up 48 cents Monday.
After the market closed, Ascent Solar reported a net loss of $85.2 million, or $2.63 per share, on revenue of about $1 million for the three-month period that ended June 30. That included a write down of $78 million in the carrying value of property, plant and equipment and on deposits on manufacturing equipment.
In the same quarter a year ago, the company reported a net loss of $7.7 million, or 29 cents per share, on revenue of $446,014.