FH Capital will acquire a 75.1% stake in JinkoSolar’s US subsidiary, while JinkoSolar will retain a 24.9% minority interest
FH plans to double the Florida factory’s 2 GW solar module production capacity and launch battery energy storage manufacturing in the US
The deal reflects growing pressure from US FEOC rules, which are prompting foreign solar manufacturers to restructure their US operations
Chinese solar PV manufacturer JinkoSolar is selling the majority stake in its US subsidiary that operates the company’s 2 GW module manufacturing facility in Florida to US-based private equity firm FH Capital. The transaction is valued at $191.5 million.
The transaction will bring to FH’s kitty controlling ownership of the 2 GW module fab as well as the growing battery energy storage systems (BESS) business. FH plans to deploy additional expansion capital to double the current solar module production capacity at the Florida fab and also launch BESS manufacturing in the US.
The definitive agreement signed will lead to FH holding 75.1% of JinkoSolar’s US subsidiary Jinko Solar (U.S.) Industries Inc. via FH JKV Holdings Limited, while the Chinese company will retain 24.9% minority interest.
FH is led by Sanjeev Chaurasia as the Managing Partner. Chaurasia was previously the Managing Director at Credit Suisse, where he led JinkoSolar’s initial public offering (IPO) on the NYSE in 2010.
“The transaction leverages JinkoSolar's well established seven-year U.S. manufacturing presence, proven technology, and strong relationships with blue-chip U.S. customers, with FH Capital's capabilities to create and manage a dynamic platform positioned to meet rising demand for domestic solar and storage solutions,” said Chaurasia.
According to JinkoSolar, the deal aligns with the ongoing strategic restructuring of its overseas business and assets in light of prevailing uncertainties in the global macroeconomic environment. It is expected to optimize its overseas asset allocation, reduce costs, support its long-term international strategy, and maintain its presence in the US market.
The US government’s growing scrutiny and regulatory pressure around Foreign Entity of Concern (FEOC) rules are prompting foreign-based manufacturers operating in the US to rethink their business strategies. Under the rules, companies using components sourced from prohibited foreign entities (PFE) may not qualify for Section 45X manufacturing tax credits (see US Treasury Tightens Clean Energy Tax Credit Eligibility Under FEOC Guidance).
Recently, China’s Ningbo Boway Alloy Material exited Boviet Solar’s US module unit, selling it to the US subsidiary of INOX Clean Energy of India (see INOX Solar Americas Acquires Boviet Solar’s US Module Assets).
JinkoSolar said the deal with FH will help recover its initial investment while continuing to benefit from the domestic factory operations. It will continue to sell PV products in the US market.
Nigel Cockroft, the US General Manager of JinkoSolar, said, “We believe this transaction provides the right ownership, management and strategic direction for this new venture to grow capacity and serve the growing demand for high performance U.S.-sourced renewable energy products.”
JinkoSolar’s compatriot Trinasolar has already sold its US module fab to FREYR, which later rebranded to T1 Energy (see Amid ‘Geopolitical Risks’ Trinasolar Sells Off 5 GW US Solar Module Plant).