Sky Solar Holding Ltd. (NASDAQ:SKYS) shares vaulted higher by more than 54 percent to $4.10 in Wednesday’s mid-day trading after the Hong Kong-based solar parks developer announced the signing of a Letter of Intent with Solar Partnership Capital [SPC] to sell certain assets held by Sky Solar Japan [SSJ].
Solar Partnership Capital confirmed in a statement its intention to acquire the remaining stakes in Sky Solar Japan’s 152 MW solar projects. The company also said that it’s willing to take certain specified liabilities linked with respect to those projects, and that it is ready to pay $165 million to Sky Solar for the deal. SPC noted however, that all of the SSJ’s liabilities and assets that do not constitute Transaction Assets will be transferred to a new entity.
“We are very pleased to announce the potential sale of part of our solar asset portfolio in Japan,” Sky Solar CIO Sanjay Shrestha said in a company statement, adding that the proceeds will be used to repay certain existing loans and to invest in opportunities in Japan and key target markets.
“Through this transaction, we remain committed to the development of our remaining projects in Japan while also unlocking value from our 74 MW of completed solar projects and 78 MW of solar projects that have not yet been completed in Japan,” Shrestha added.
The transaction’s Letter of Intent terminates on August 31, but may be extended by mutual consent.
Given that SKY’s average daily volume over the last 3 months has been approximately 70 thousand shares a day, today’s 9 million volume represents a substantial spike over the norm.
On trading measures, Sky solar shares have declined 5.38% in the last 4 weeks and 6.05% in the past three months. Over the past 5 trading sessions the stock has lost 3.30%. The $176 million market cap company has a median Street price target of $6.50 with a high target of $8.00.
Sky Solar Holdings Ltd. ADR is down 64.89% year-over-year, compared with a 3.60% gain in the S&P 500. The stock has lost nearly 52 percent of its value since Jan. 1.