HEBEI, China, Sept. 16, 2008 (GLOBE NEWSWIRE) -- On May 19, 2008, JA Solar Holdings Co., Ltd. ("JA Solar") (Nasdaq:JASO) closed its public offerings of $400 million aggregate principal amount of senior convertible notes due 2013 and up to 13,125,520 American depositary shares, or ADSs, which ADSs were borrowed by Lehman Brothers International (Europe) ("Lehman Europe") and Credit Suisse International ("CS"), affiliates of Lehman Brothers Inc. and Credit Suisse Securities (USA) LLC who were the joint book-running managers of the notes offering, pursuant to ADS lending agreements with JA Solar. The notes sold include $50 million aggregate principal amount of notes issued pursuant to the underwriters' exercise in full of their option to purchase additional notes.
In connection with the senior note offering, JA Solar entered into a 6.56 million share lending agreement with each of Lehman Europe and CS. Under the stock lending agreement with Lehman Europe, the shares must be returned to the Company no later than May 15, 2013, the maturity date of the Senior Notes. Until that time, the shares are considered to be issued and outstanding for corporate law purposes. The Company is investigating the bankruptcy and insolvency proceedings involving Lehman Brothers Holdings Inc. ("Lehman") and Lehman Europe. At this time, the Company is unaware of the intentions of Lehman Europe with respect to the return of the 6.56 million shares attributed to Lehman Europe under the share lending agreement or whether Lehman Europe will be able to fulfill its obligation to return the borrowed shares in 2013. Until such further information is available, the Company will continue to consider the shares not outstanding for the purpose of computing and reporting per share results. The Company intends to vigorously assert its rights with respect to such shares, including, taking advantage of applicable insolvency laws that specifically protect financial market transactions similar to these.
Also in connection with the Convertible Notes, JA Solar entered into a capped call transaction with Lehman Brothers OTC Derivatives Inc. to reduce the ultimate dilution that would otherwise occur as a result of new common stock issuances upon conversion of the Senior Notes. The capped call transaction effectively increases the conversion price of the Senior Notes to $37.375 per share compared to the actual Senior Notes conversion price of $30.475 per share. To date, the Company has paid approximately $16.2 million for the capped call transaction to Lehman. The Company intends to work with other investment banks to determine its best course of action to maintain the original intent of the capped call transaction. Lehman Brothers OTC Derivatives Inc. is not presently the subject of insolvency proceedings.
In addition, the Company has approximately $100 million worth of USD 3-Month LCMNER Index-Linked Note (the "Note"), issued by Lehman Brothers Treasury Co. B.V. incorporated in The Netherlands, guaranteed by Lehman. Lehman Europe is the dealer of the Note. This note is linked to an index of Lehman Brothers Commodity Alpha Trading Strategies I Excess Return (LCMNER). The maturity date of the Note is October 9th, 2008, with 100% principal protection. We are monitoring the development of the Lehman insolvency proceedings closely, but based on our review of the information made publicly available by Lehman, Lehman Brothers Treasury Co. B.V., the issuer with respect to this transaction, is not presently the subject of insolvency proceedings.
"The agreements in question are with affiliates of Lehman Brothers Holdings Inc., some of which have not filed for bankruptcy protection. In addition, these financial markets transactions are structured to provide JA Solar with as much legal protection as is customarily available in transactions such as these, and the law protects such transactions even in circumstances of insolvency," said Dan Lui, Chief Financial Officer. "While the ultimate impact of the situation is expected to unfold over the next few months, we are availing ourselves of all legal remedies to protect our Company and its shareholders in this very fluid situation."
"We have funds on deposit with other international commercial banks," continued Lui. "We have sufficient cash to complete our Yangzhou facility and support our other operating needs as we drive to profitability in 2009."
Mr. Lui concluded, "At this point, we do not foresee that these financial transactions with Lehman Brothers will impact our 2008 and 2009 outlook. As such, we are reconfirming our full year 2008 guidance with revenue in the range of RMB 7.22 billion (US$1.05 billion) to RMB 8.02 billion (US$1.17 billion) and gross margin in excess of 20%, along with our full year 2009 guidance with revenue in the range of RMB 13.6 billion (US$2.0 billion) to RMB 15.0 billion (US$2.2 billion) and gross margin in excess of 20%."
Conference Call Information
JA Solar's management will conduct a conference call today at 9.00 p.m. on Tuesday, September 16 in Hebei, which will be 9:00 a.m. on Tuesday, September 16 in New York. During the call, time will be set aside for analysts and interested investors to ask questions of executive officers.
The call may be accessed by dialing 1-877-407-0784 or 1-201-689-8560 (international). A live webcast of the conference call will be available on the Company's website at www.jasolar.com. The playback will be available beginning two hours after the live call and will be accessible by dialing 1-877-660-6853 or 1-201-612-7415 (international). The account number to access the replay is 3055 and the passcode is 297546.
About JA Solar Holdings Co., Ltd.
Based in Hebei, China, JA Solar Holdings Co., Ltd. is an emerging and fast-growing manufacturer of high-performance solar cells. The Company sells its products to solar module manufacturers who assemble and integrate its solar cells into modules and systems that convert sunlight into electricity. For more information, please visit http://www.jasolar.com.
Safe Harbor Statement
This press release contains forward-looking statements made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. JA Solar, Inc. (the "company") cautions you that any statements contained in this press release that are not strictly historical statements constitute forward-looking statements. Such forward-looking statements include, but are not limited to, those related to: the sufficiency of the company's cash to complete Yangzhou Facility, the ability to achieve profitability in 2009 and the possible resolution of any claims or defaults arising under the company's agreements with Lehman Brothers Holdings Inc. and its affiliates. These statements are neither promises nor guarantees, and involve risks and uncertainties that could cause actual results to differ materially from such forward-looking statements, including risks associated with the company's ability to successfully manufacture and sell its products; uncertainties related to government regulations, subsidies and incentives; risks from various economic factors such fluctuations in currency exchange rates given the company's Euro-denominated sales contracts and other risks and uncertainties identified in the company's filings with the Securities and Exchange Commission. The company disclaims any obligation to publicly update or revise any such statements to reflect any change in company expectations, or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.