Shares of ReneSola (NYSE:SOL) were crushed today, down by 19% as of 1:45 p.m. EST after the company announced a stock offering. Separately, the company also announced an agreement to sell solar assets.
ReneSola is looking to raise $20 million in fresh capital through a new registered direct offering. The solar company will sell roughly 2.1 million American depository shares (ADS) at a price of $9.50 per share. That offering price represents a 21% discount from yesterday's close of $12. ReneSola intends to use the net proceeds from the deal for working capital as well as to expand its pipeline of new solar projects.
The company is also selling two ground-mounted solar parks in Romania to Alternus Energy Group. The total capacity of those assets is 15.4 megawatts (MW), consisting of a 9.4 MW solar park in a municipality of Costestii din Vale in Dambovita County and a 6 MW installation in the municipality of Dumbrava in Prahova County.
In a statement regarding the asset sale, ReneSola CEO Yumin Liu commented:
We are excited to partner with Alternus Energy, and look forward to future collaboration. The proceeds from the sale of the operating assets will enable us to generate strong cash flow, realize profits and further strengthen our financial position. We have a strong pipeline of project activity.
The offering is mainly responsible for today's plunge due to the dilutive effects. The deal is expected to close on or about Dec. 28.