UniSource Energy Corp. has agreed to sell Global Solar Energy to Solon AG, a German producer of photovoltaic modules, and a European financial investor. Solon is to acquire a 19% stake in Global Solar Energy. The company, based in Tucson, Arizona, manufactures thin-film Copper Indium Gallium diSelenide (CIGS) solar cells and supplies integrated solar power systems. The price for this share in the company is about US$3 million. A European venture capital investor has acquired the remaining 81%.
With the aid of its new investors, Global Solar intends to raise its production capacity for thin-film solar cells from its present level of 2 Megawatt to at least 40 Megawatt by the beginning of 2008.
UniSource Energy will receive approximately $16 million for its debt and equity positions in Global Solar, a Tucson-based manufacturer of flexible, thin-film photovoltaic material. UniSource Energy also will receive an option to repurchase between 5 and 10 percent of Global Solar in the future for a nominal fee.
"This agreement gives us a reasonable exit from Global Solar while leaving us an opportunity to capitalize on the company's future success," said James S. Pignatelli, chairman, president and CEO of UniSource Energy. "It also allows us to focus our resources and attention more fully on our core utility operations."
Global Solar was established in 1996 as a joint venture overseen by Millennium Energy Holdings, a UniSource Energy subsidiary that holds the company's unregulated energy-related investments. The sale of Global Solar is part of UniSource Energy's ongoing plan to scale back Millennium's involvement in actively managed investments.
The sale is expected to close by mid-April 2006, subject to certain conditions contained in the agreement. In the event that the sales agreement is breached, the breaching party will pay a break-up fee of $800,000. UniSource Energy expects to record approximately $1 million of after-tax losses related to the discontinued operations and disposal of Global Solar.
