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Hydro Makes Investment in Ascent Solar Tuesday March 13, 4:40 pm ET
LITTLETON, Colo.--(BUSINESS WIRE)--Norsk Hydro ASA (NYSE:NHY - News), today acquired 1.6 million shares of the common stock of Ascent Solar Technologies, Inc. (Nasdaq:ASTI - News; BSE:AKC - News) in a private placement as the precursor to a strategic relationship between the parties. The shares purchased represent approximately 23.0% of the total shares issued and outstanding after the sale. Hydro purchased the shares for $5.7725 per share, or $9,236,000 in the aggregate, representing a 25% premium on the average of the closing bid prices in the five trading days preceding the sale. Subject to shareholder approval, Norsk Hydro will be entitled to purchase up to an additional 12% of the outstanding shares of Ascent Solar's common stock (post-issuance) and a corresponding proportion of Class A and Class B Warrants. ADVERTISEMENT
With approximately 33,000 employees in nearly 40 countries, Hydro is one of the world's leading suppliers of energy and aluminum, and its building systems and aluminum division are among the largest in the world.
"Ascent Solar's flexible thin film is very exciting. Not only due to the low weight that makes the solar cells easy to transport, install and maintain, but also because flexible solar cells have a large number of potential applications in the future," says Jorgen C. Arentz Rostrup, who heads Hydro's market activities.
"It's our ambition to enhance our activities within solar and building systems. Ascent Solar is among the leading companies in thin film. We are therefore looking for opportunities to develop integrated building solutions together with Ascent Solar," says Rostrup.
The solar market is growing rapidly. Since 1998 there has been an annual growth of approximately 40 per cent in the market for conventional solar energy and it has been reported that the market for thin film technologies is growing at roughly 70 percent annually.
Ascent Solar President and CEO Matthew Foster said, "Our stated vision has been to see the day when building integrated photovoltaics will become pervasive and commonplace in the everyday lives of people throughout the world. There is no better opportunity than to work with one of the world's leading energy and building systems producers with operations in nearly forty countries to bring this vision to a reality. We are humbled and excited by the opportunity to make it happen with the Hydro team."
About Hydro:
Headquartered in Oslo, Norway, Hydro is a leading offshore producer of oil and gas and is the third-largest integrated aluminum supplier in the world. Hydro building systems is second largest in the world and markets product under three main brand names DOMAL, TECHNAL, and WICONA. Please visit Hydro's website for additional information at www.hydro.com
About Ascent Solar Technologies:
Ascent Solar Technologies, Inc. is a developer of state-of-the-art, thin-film photovoltaic materials and modules and is located in Littleton, Colorado. Please visit Ascent Solar's website for additional information at www.ascentsolar.com.
Statements in this press release that are not statements of historical or current fact constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause Ascent Solar's actual operating results to be materially different from any historical results or from any future results expresses or implied by such forward-looking statements. In addition to statements that explicitly describe these risks and uncertainties, readers are urged to consider statements that contain terms such as "believes," "belief," "expects," "expect," "intends," "intend," "anticipate," "anticipates," "plans," "plan," to be uncertain and forward-looking. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in Ascent Solar's filings with Securities and Exchange Commission.
Contact: PR Financial Marketing LLC, Houston Jim Blackman, 713-256-0369 (Investor Relations) jimblackman*prfinancialmarketing.com or Brand Fortified Public Relations Kelly Brandner, 303-289-4303 (Media) kellybrandner*msn.com
-------------------------------------------------------------------------------- Source: Ascent Solar Technologies, Inc.
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Unregistered Sale of Equity Securities, Other Events, Financial S
Item 3.02 Unregistered Sales of Equity Securites. On March 13, 2007, Ascent Solar Technologies, Inc. ("Ascent") announced that it had consummated a private placement of securities to Norsk Hydro Produksjon AS ("Norsk Hydro"), a wholly-owned subsidiary of Norsk Hydro ASA, one of the world's leading suppliers of energy and aluminum. Norsk Hydro acquired 1,600,000 shares of Ascent's outstanding common stock, representing an approximately 23.0% holding in Ascent. The arrangement creates a defined path for Norsk Hydro to become the largest shareholder, and a significant strategic business partner, of Ascent.
The private placement was effected pursuant to a Securities Purchase Agreement, Registration Rights Agreement and Stockholders' Agreement, each dated March 13, 2007. On the same date, Ascent's Chairman Dr. Mohan S. Misra (and his affiliates Inica, Inc. and ITN Energy Systems, Inc.) executed a Voting Agreement with Norsk Hydro. The material terms of each agreement are described below.
Securities Purchase Agreement
Under the terms of the Securities Purchase Agreement:
(a) Norsk Hydro agreed to acquire 1,600,000 shares of Ascent's common stock (representing, upon completion, approximately 23.0% of the Company's outstanding common stock) at a price of US$5.7725 per share or US$9,236,000 in the aggregate (the "Tranche 1 Shares") at a closing that occurred on March 13, 2007. The purchase price represents 125% of the average of the closing bids of Ascent's common stock in the five consecutive trading days ending on and including March 12, 2007, as reported by Nasdaq. The closing bid price of the common stock reported by Nasdaq on March 12, 2007 was $4.67. Immediately upon completion of the sale, Ascent's directors and officers beneficially owned approximately 24.0% of the outstanding common stock.
(b) Ascent issued to Norsk Hydro an option (the "Initial Warrants Option") to purchase restricted Class A Warrants and restricted Class B Warrants (together, the "Initial Warrants") that are otherwise identical to the Class A Warrants and Class B Warrants currently traded on Nasdaq under the symbols ASTIW and ASTIZ, respectively. The number of restricted warrants that Norsk Hydro will be entitled to purchase pursuant to the Initial Warrants Option will be that number of Class A Warrants that will result in Norsk Hydro owning 23.0% of all issued and outstanding Class A Warrants, and that number of Class B Warrants that will result in Norsk Hydro owning 23.0% of all issued and outstanding Class B Warrants. Norsk Hydro may not exercise the Initial Warrants Option unless and until Ascent's stockholders approve the terms of the Initial Warrants Option and the Tranche 2 Option (defined below) (the "Stockholder Approval"). The Initial Warrants Option expires on the second anniversary of such Stockholder Approval. If the Initial Warrants Option is exercised: the purchase price of each restricted Class A Warrant sold pursuant to the option will be equal to the average of the closing bids of Ascent's Class A Warrants in the five consecutive trading days ending on and including the trading day that is one day prior to the date of exercise, as reported by Nasdaq; and the purchase price of each restricted Class B Warrant sold pursuant to the option will be equal to the average of the closing bids of Ascent's Class B Warrants in the five consecutive trading days ending on and including the trading day that is one day prior to the date of exercise, as reported by Nasdaq.
Ascent is not obligated to register the Class A Warrants and Class B Warrants that would be issued upon exercise of the Initial Warrants Option; however, Norsk Hydro has received registration rights as to the shares of common stock underlying the Initial Warrants. Please refer to "Registration Rights Agreement" (below) for information about these registration rights.
Exercise of the Initial Warrants by Norsk Hydro is subject to certain restrictions intended to both limit and protect Norsk Hydro's percentage ownership of Ascent's common stock for a period of time. These restrictions are described in "Stockholders' Agreement" below.
(c) Ascent issued to Norsk Hydro an option (the "Tranche 2 Option") to purchase up to an additional 12% of restricted common stock (the "Tranche 2 Shares"), Class A Warrants and Class B Warrants (together the "Tranche 2 Warrants" and, together with the Tranche 2 Shares, the "Tranche 2 Securities") that would result in Norsk Hydro owning up to 35.0% of the issued and outstanding common stock, Class A Warrants and Class B
Warrants post-sale. Norsk Hydro may not exercise the Tranche 2 Option until December 13, 2007, and then only if Stockholder Approval has been obtained. The Tranche 2 Option expires on the second anniversary of such Stockholder Approval. If the Tranche 2 Option is exercised: the purchase price of each restricted share sold pursuant to the option will be equal to the average of the closing bids of Ascent's common stock in the five consecutive trading days ending on and including the trading day that is one day prior to the date of exercise, as reported by Nasdaq; the purchase price of each restricted Class A Warrant sold pursuant to the option will be equal to the average of the closing bids of Ascent's Class A Warrants in the five consecutive trading days ending on and including the trading day that is one day prior to the date of exercise, as reported by Nasdaq; and the purchase price of each restricted Class B Warrant sold pursuant to the option will be equal to the average of the closing bids of Ascent's Class B Warrants in the five consecutive trading days ending on and including the trading day that is one day prior to the date of exercise, as reported by Nasdaq.
Ascent is not obligated to register the Class A Warrants and Class B Warrants that would be issued upon exercise of the Tranche 2 Option; however, Norsk Hydro has received registration rights as to the Tranche 2 Shares and shares of common stock underlying the Tranche 2 Warrants. Please refer to "Registration Rights Agreement" (below) for information about these registration rights.
Exercise of the Tranche 2 Warrants by Norsk Hydro is subject to certain restrictions intended to both limit and protect Norsk Hydro's percentage ownership of Ascent's common stock for a period of time. These restrictions are described in "Stockholders' Agreement" below.
(d) Ascent has agreed to submit the terms of the Initial Warrants Option and the Tranche 2 Option to Ascent's stockholders for approval at the 2007 annual meeting of stockholders.
The foregoing description of the Securities Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Securities Purchase Agreement, which is filed as an exhibit hereto and incorporated herein by reference.
Stockholders' Agreement
Under the terms of the Stockholders' Agreement:
(a) Norsk Hydro has agreed that until the second anniversary of Stockholder Approval, it may exercise Initial Warrants and Tranche 2 Warrants only to sustain its then-existing percentage ownership of Ascent common stock.
(b) Norsk Hydro has agreed that until the second anniversary of Stockholder Approval, it will not, without prior approval of Ascent's Board of Directors, acquire more than 35% of Ascent's issued and outstanding common stock. This restriction will terminate in certain circumstances, including if: (i) Ascent's Board of Directors (its "Board") solicits, or announces an intention to solicit, an offer by a third party to acquire at least 20% of Ascent's common stock or assets (an "Acquisition Proposal"); (ii) Ascent's Board approves, accepts, authorizes or an Acquisition Proposal; (iii) Ascent or an affiliate enters into any letter of intent or agreement with respect to an Acquisition Proposal; or (iv) a third party acquires or announces an intent to acquire at least 20% of Ascent's outstanding common stock.
(c) Norsk Hydro will receive preemptive rights to purchase its pro rata share of future offerings by Ascent of equity securities (or rights convertible into equity securities), with a limited number of customary exceptions.
(d) After Stockholder Approval of the Initial Warrants and the Tranche 2 Securities, the Company shall increase the size of its Board from five to seven and, so long as Norsk Hydro continues to hold at least 15% of Ascent's outstanding common stock, shall use its reasonable efforts to elect a designated representative of Norsk Hydro to the Board ("Director Designee"). If Stockholder Approval is not obtained by July 13, 2007, then Ascent shall still use its reasonable efforts to elect a Director Designee the Board and to cause the Board to include a Director Designee until at least March 13, 2009, even if during any portion of that period Norsk Hydro holds less than 15% of Ascent's outstanding common stock. Norsk Hydro also may designate an observer in addition to the
Director Designee to attend all Board meetings at which non-independent or management directors are permitted in attendance. . . .
Item 8.01 Other Events On March 13, 2007, Ascent issued a press release announcing the execution of the Securities Purchase Agreement and the private placement of 1,600,000 shares of common stock. A copy of the press release is filed as Exhibit 99.5 hereto.
Ascent Solar Technologies (ASTI) Share price as of Tuesday's close: $4.65 Share price now: $8.79 Percent change: 89% Volume: 6.2 million shares, daily average 170,000
The News Investors in Ascent Solar Technologies (ASTI: 8.79, 0.00, 0.0%) lit up Wednesday thanks to the land of the midnight sun. Norway's Norsk Hydro (NHY: 30.46, 0.00, 0.0%) made a $9.2 million investment in the tiny Littleton, Colo., company, powering Ascent's shares to nearly double their value, pushing them up 89% by the close of trading.
The private placement represented a 23% stake in the company, according to Ascent, which spun out last year from ITN Energy Systems, a research and development company that works on government and private technology development, largely for the aerospace and defense industries.
Hydro paid about $5.77 a share, a 25% premium to Tuesday's closing price. The Oslo-headquartered company, which is the world's third-largest aluminum producer, will have the option to increase its stake by 12% of the outstanding shares once the deal is approved by shareholders.
Ascent Chief Executive Matt Foster said the investment, announced late Tuesday, will help pay for construction of a production plant for its thin-film photovoltaic systems used in solar panels. The plant should reach its initial production capacity of photovoltaic cells capable of generating 1.5 megawatts worth of power by early 2008. Ascent plans to increase production to 100 megawatts as demand grows, he says.
"[Norsk Hydro] had been looking in this space for about two years, and they looked at other thin film companies," Foster says of the deal, which closed in about three-and-a-half weeks. "They wanted to move forward, and they came out for a visit. Within 30 minutes they knew they'd found the right company."
In November, Norsk Hydro made a $24.5 million investment in Norsun, a Norwegian company that's building a plant to produce monocystalline silicon wafers for solar cells.
The Analysis For solar power enthusiasts, the transaction reflects trends both at Norsk Hydro and in the global market for sun-supplied power.
"There's a lot of money going into solar," says Robert Margolis, a senior analyst at the National Renewable Energy Laboratory, the Department of Energy's main research laboratory for alternative energy, in Golden, Colo. "There's a lot of opportunity, and the market's growing really fast."
Domestic incentives are gaining ground in the tiny, heavily subsidized market, which still hasn't reached commercially applicable production capacity. There's California's Solar Initiative, which is slated to spend $2.9 billion over 10 years to boost solar production in the state to a total three gigawatts, enough to supply power to about a million houses. The Department of Energy last week announced a list of 13 companies it's considering for as much as $168 million in federal research funding. The potential recipients run the gamut from tiny, privately held Nanosolar to corporate behemoths such as Boeing (BA: 89.98, 0.00, 0.0%) and Dow Chemical (DOW: 43.38, 0.00, 0.0%).
Globally, the clean energy market notched revenues of $55 billion last year, and is projected to grow to $226 billion by 2016, according to Clean Edge, an energy research firm based in San Francisco and Portland, Ore. Clean Edge projected solar photovoltaic revenue from modules, system components, and installations will grow to $69.3 billion by 2016 from $15.6 billion last year.
Ascent posted a loss of 30 cents a share for the third quarter of 2006, its most recent quarterly filing with the Securities and Exchange Commission. Total losses for the first nine months of last year totaled $1.12 a share.
Norsk Hydro is in the midst of a massive transformation that involves a $28 billion sale of its oil production and exploration business to government-controlled Statoil (STO: 24.95, 0.00, 0.0%), creating the world's largest offshore operator, with a 1.9 million barrel daily production capacity.
That's made its tiny alternative energy operation potentially more important, says Kjetil Bakken, an analyst at Fondsfinans, a Norwegian investment bank in Oslo.
"This seems to fit nicely into that portfolio," he says. "The new management has reorganized and they have a new executive who is covering power generation and alternative energy. It's an area where Hydro seems to be increasing its focus."
The Norwegian government last week pledged $4.9 billion in international development aid over the next three years to accelerate clean energy development in emerging markets, which could bolster Hydro's international market.
The Bottom Line A little perspective is necessary, even with a feel-good story about a company that will help wean the world from its fossil-fuel addiction.
On Monday, Ascent had a market capitalization of $25 million. One huge deal later it's value jumped to $34 million. That's a bit more than twice what alternatively powered slugger Barry Bonds will make playing baseball for the San Francisco Giants this season.
This is still a tiny market, with all kinds of government supports that make a solar stock investment one based more on conviction and optimism than demonstrable fundamentals. But it's got to start somewhere, and Margolis, of the National Renewable Energy Laboratory, says growth rates are hard to ignore.
"When you get up to 2.5 gigawatts, you're starting to talk about real numbers," he says. "I hate to say that solar's around the corner — the point is that it's happening. It's becoming a real, relevant factor."
For the investors who've stuck with Ascent since its rocky Nasdaq debut last July, when the $5.50 a share stock plunged nearly 40% within six weeks of its initial public offering, it's the first of what CEO Foster hopes will be a glowing success story.
"I think it's starting to build," he says. "This news adds credibility.
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