Maxeon Solar Technologies, maker of the Maxeon and SunPower solar module brands, is raising capital from a $157.4 million private placement and a separate $42 million private placement with TCL Zhonghuan.
Maxeon Solar Technologies has priced its public offering to raise $157.4 million in equity returns. It said it will use the funds for Maxeon 7 module production and general corporate purposes.
Maxeon will sell 7.48 million shares of common stock, including 1.87 million shares of historic investor TotalEnergies, at a price of $28 per share. At closing, the company expects to generate more than $157 million in gross revenue. According to the company’s statement, the offer was increased by 10% from the original announcement that Maxeon sold 6.8 ordinary shares. The add-on was expected to end on May 19.
BofA Securities and Morgan Stanley are acting as joint bookrunners for Maxeon’s offering. Raymond James and Roth Capital Partners led the offering. In an additional private placement, TCL Zhonghuan Renewable Energy, Maxeon’s current 23.7% shareholder, will purchase 1.5 million Maxeon shares for approximately $42 million.
TCL Zhonghuan is a Chinese semiconductor manufacturer that mainly operates in the solar energy market. In July 2020, TCL acquired Tianjin Zhonghuan Semiconductor after the consumer electronics maker won an auction to buy shares in its parent company, state-owned Zhonghuan Electronic Information Group.
Maxeon will use the capital increase to fund a 500 MW capacity expansion of its cell manufacturing capacity for Maxeon 7 interdigitated back contact (IBC) panels, which is expected to increase its next-generation panel manufacturing capacity by approximately 50%. said. The Maxeon 7 IBC panels are expected to be the world’s most efficient solar panels with a module efficiency of around 24 percent.
The expansion of IBC production would utilize the previously closed Philippine warehouse and module assembly at other existing Maxeon facilities. The Philippines facility will be named the “Fab5” facility and will be located near Maxeon’s current Fab4 facility, which currently houses the Maxeon 7 pilot line.
Maxeon said Fab5 factory production will ramp up in the second half of 2024. The company said the new volume produced at Fab5 will be sold into the distributed generation (DG) market, including expanding supply volume to the new US residential channel market. The new Fab5 expansion capacity will enable more deliveries to its European market and balance the mix of Maxeon and Performance lines.
Maxeon’s total capital investment (capex) for the IBC expansion is $200 million, of which approximately $50 million is for site preparation and long lead time items included in the previous 2023 guidance. Including $157.4 million and $42 million in additional revenue and private placement revenue, the company’s 2023 capex budget is $150 million to $170 million, of which $100 million is related to the Fab5 ramp-up.
Guidance on domestic content
In filings with the US Securities and Exchange Commission (SEC), Maxeon said company management is reviewing the Internal Revenue Service’s May 12 guidance on domestic content bonus incentives under the US Inflation Allowance Act.
For taxpayers using the Section 48 Investment Tax Credit (ITC), receiving the domestic content bonus would increase the credit by 10%, which in most cases is between 30% and 40% of the price of the qualifying solar property. According to the power, the use of production tax (PTC) would increase by 10% as a result of the eligibility of domestic content.
“The IRS guidance supports our announced plans to deploy a multi-GW cell and module plant in the US to manufacture solar products for both the DG and utility power markets,” Maxeon said. “We are currently evaluating this guidance, which provides guidance on how the solar products we manufacture help our customers qualify for the domestic content bonus in the ITC and PTC and imposes requirements for certain accounting and certifications.”
Maxeon was separated from SunPower in August 2020, when both became separate entities. TotalEnergies owns a minority stake in Maxeon.
The company’s Performance line of solar modules utilizes Maxeon’s solar cell technology, which was originally developed by SunPower. The technology is protected by 83 granted patents. The 425W modules use bifacial mono-PERC solar cells manufactured on large eight-inch G12 wafers and have an efficiency of 20.6%, according to Maxeon.
Maxeon is headquartered in Singapore but is listed on the Nasdaq Capital Markets, where it currently trades at $28.66 per share and has a market capitalization of $1.3 billion. The company has 5,344 employees worldwide, primarily based in Mexico (39%), Malaysia (33%) and the Philippines (20%), according to its annual financial statements.