NEW YORK, March 10, 2011 (GLOBE NEWSWIRE) -- SunSi Energies Inc. (the "Company") (OTCQB:SSIE) today announced that it had completed the acquisition of a 60% equity interest in He Xie Silicon Co. ("Wendeng"), a trichlorosilane ("TCS") facility located in Weihai City, China. TCS is a chemical compound primarily used in the production of polysilicon, an essential raw material in the production of solar cells for photovoltaic (PV) panels that convert sunlight to electricity for homes, businesses and farms, for example. Additionally, purified trichlorosilane is the principal source of ultrapure silicon in the semiconductor industry. As a result of consummating this accretive transaction, SunSi will become immediately profitable on a consolidated basis.
Under the terms of the agreement, SunSi will pay the sole shareholder of Wendeng approximately $3.15 million in cash in two installments, including $455,000 and $2.7 million within a three month and six month period, respectively. This payment will be guaranteed with the issuance of 1,349,628 common shares of SunSi, which is required to be re-purchased by the Company within a six month period, which equates to a price of $2.00 per share. Additionally as part of the transaction, an existing shareholder of SunSi will contribute 1,574,566 shares of SunSi common stock to the Wendeng shareholder.
Wendeng is recognized in China for the quality of its TCS, and its efficiency. It benefits from long standing relationships with billion dollar clients. For the twelve month period ended May 31, 2010 Wendeng had revenues of approximately $12.0 million and generated pre-tax operating profit of approximately $1.9 million. Due to the rising price of TCS and increased orders, Wendeng revenues are expected to be $20.0 to $25.0 million for the period ending May 31, 2011. Currently Wendeng's nameplate capacity is approximately 22,000 metric tons (MT) but is now in the process of an expansion to 30,000 MT that is expected to be completed before the end of April 2011. The construction of a second expansion will commence in May, 2011. The total expansion, which will increase Wendeng's capacity to 75,000 MT, is expected to be completed by the end of 2011.
The 40% minority shareholder of Wendeng will also contribute to the expansion costs to maintain his equity interest of 40% and will continue along with his management team to provide TCS technology, technical assistance and expertise for the construction, along with staff training while operating the facility during and after the expansion. SunSi has retained Wendeng's entire management team and all of its employees.
David Natan, SunSi's Chief Executive Officer stated, "After many months of work, we are extremely pleased to have completed the acquisition of a 60% interest in Wendeng, one of the premier TCS facilities in China. Currently, Wendeng is operating at full capacity and generating excellent profitability. Based on the current and anticipated future worldwide demand for TCS, we are very comfortable undertaking the expansion of the Wendeng facility to 75,000 MT. On a consolidated basis we are now a profitable company going forward. As a result, we expect to file for an AMEX listing within the next couple of months. We remain committed to generating value for shareholders."
Richard St-Julien, President of SunSi Energies Hong Kong Limited stated, "During our due diligence process we recognized the quality of the Wendeng facility and its exceptional management team. This acquisition along with its planned expansion when completed, will give SunSi the status as one of the world leaders in TCS production. We are very encouraged by the strategic support we have received from the local and provincial Chinese government. Finally, SunSi is fortunate to have an excellent partner at Wendeng. His willingness to allow us to close the transaction on such favorable terms, and his agreement to take in excess of 50% of his purchase consideration in SunSi stock, is indicative of the confidence he has in us and the future prospects for SunSi."
About SunSi Energies Inc. ("SunSi")
SunSi's goal is to acquire and develop a portfolio of high quality trichlorosilane producing facilities that are strategically located, and possess a potential for future growth and expansion. SunSi now controls approximately 50,000 MT of TCS production which is believed to be the largest TCS only company in China.
Relatively unknown, but essential to the solar industry TCS is a chemical primarily used in the production of polysilicon, which is an essential raw material in the production of solar cells for photovoltaic (PV) panels that convert sunlight to electricity for homes, businesses and farms. TCS is considered to be the first product in the solar PV value chain before polysilicon, and is also the principal source of ultrapure silicon in the semiconductor industry. It is believed that SunSi will become the first and only "pure play" public company in the world focusing exclusively on the production and sales of TCS.
SunSi Energies Inc. is traded on the OTCQB under the ticker SSIE. For additional information, please visit the Company's website: www.sunsienergies.com.
Acorn Management Partners ("Acorn") SunSi's investor relations firm is a leading independent investor relations firm, specializing in shareholder relationships while offering a full range of advisory and operational support to domestic and international companies. Acorn's team of experts is dedicated to building relationships for our corporate clients in the global capital markets giving management the freedom to focus on their strengths and core activities. Acorn has offices in Atlanta, Georgia and London, UK.
Forward-looking Statements:
This news release contains forward-looking statements related to the future financial condition and results of SunSi's operations. These statements are based on current expectations and estimates about the trichlorosilane markets and industry in which SunSi operates, management's beliefs and assumptions regarding these markets, future growth prospects, becoming immediately profitable, the commencement of generating revenues, completion of the Wendeng expansion plan, completion of the size of SunSi's TCS capacity compared to other Chinese TCS companies, other acquisition transactions and attaining an AMEX listing. These statements are subject to important risks and uncertainties, which are difficult to predict, and assumptions which may prove to be inaccurate. Some of the factors that could cause results or events to differ materially from current expectations include, but are not limited to: general economic conditions, market or business conditions; changing competitive environment; changing regulatory conditions or requirements; changing technology; raising sufficient capital to pay the Wendeng shareholder and fund the expansion of Wendeng to 75,000 MT, attaining the required number of shareholders to meet AMEX listing requirements, the price of TCS sold within China and outside of China, attaining projected revenue of $20-$25 million at Wendeng, the level of production by the Wendeng factory, Baoaki's success in attaining new clients under its distribution agreement and success in implementing productivity initiatives. Some of these factors are largely beyond the control of SunSi. Should any factor impact SunSi in an unexpected manner, or should assumptions underlying the forward-looking statements prove incorrect, the actual results or events may differ materially from the results or events predicted. All of the forward-looking statements made in this document are qualified by these cautionary statements, therefore, there can be no assurance that the results or developments anticipated by SunSi will be realized or, even if substantially realized, that they will have the expected consequences for SunSi. Readers should not place undue reliance on any forward-looking statements. Furthermore, SunSi disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or any other occurrence.