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Monday, April 09, 2007

Solarvalue goes “Back to the Future” with Moser Baer Photo Voltaic partnership

Solarvalue AG flip flops on going it alone and finds a Silicon partner

First, a correction to my post, Moser Baer PV invests in Solarvalue AG, is required. This transaction should be described as MBPV, a wholly owned subsidiary of Moser Baer India Limited (BOM:517140), has acquired a 40% stake in Solarvalue Proizvodnja d.d., with Solarvalue AG (XETRA:SV7) retaining 60% ownership. Per the joint presentation:

Moser Baer will do a significant investment as a shareholder in this project. The acquisition will guarantee MBPV an assured supply of high grade solar wafers and help Solarvalue increase the production capabilities of its silicon production plant in Ruse.

The presentation is available on the Solarvalue AG website at:

Partnership with Moser Baer PV: press conference during the PHOTON Technology Show in Munich

In typical Solarvalue style, the amount of MBPV’s investment or the price of the 40% stake in Solarvalue Proizvodnja d.d. (perhaps they are one and the same?) were not disclosed. I suspect MBPV has committed to a staged investment of funds as Solarvalue achieves specific, objective milestones. Per my first, exclusive Solarvalue post, Secretive solar start-up, Solarvalue AG, reveals solar grade silicon production plans through joint venture bid for TDR-Metalurgija in Ruse, Slovenia, the first obvious milestone is:

After they upgrade or augment the TDR d.d. facilities with refining furnaces, Solarvalue will need to develop a stable process and deliver sample production SGS material to solar wafer and cell partners for qualification.

As I blogged in Solarvalue discusses plans and process:

“In the first six months, strategic investors will provide 20 million for setting up the production of solar grade silicon,” said Strategy Advisor Joerg Duske. One strategic investor from India has a technology expertise focus, while the second strategic investor from Europe is obtaining a stake in the TDR Ruse plant to secure silicon for solar cell production. An additional 10 million investment will be required in 2008 to complete the 4,400 metric ton capacity ramp. Later, Solarvalue may forward integrate ingot and wafer production from solar grade silicon at the TDR facility in Ruse, Slovenia.

Despite Solarvalue’s revised capital investment estimate of 10 million, my guesstimate (estimated guess) is MBPV’s first stage investment is from 5 to 10 million and their total commitment is from 20 to 30 million as factory conversion and production milestones are achieved.

Other important terms of the deal were absent. Does MBPV have an obligation to purchase 40% of annual solar grade silicon production and at what price? Is the price at or below (or above?) €40 per kilogram? Does MBPV have an option or right of first refusal to purchase additional solar grade silicon? I have a strong suspicion there may be unarticulated aspects to the MBPV investment including access, licensing, or a joint venture to bring the Solarvalue Solar Grade Silicon process to India =if= all goes well with the investment.

I reviewed John Mott’s presentation, “Metallurgical Grade Silicon and Solarvalue’s Solar Grade Silicon Procedure”, at PHOTON EXPO’s 4th Solar Silicon Conference, and I noticed the following off message line from the usual claim of 4,400 metric tons:

End of 2008: Capacity for 5,000+ metric tonnes of SGS

Innocent oversight or is this part of the answer to Solarvalue: What ever happened to the M5 arc furnace? The M5 arc furnace was not mentioned in John’s presentation.

Solarvalue shares almost hit €35 in trading after this investment was announced. Don’t forget, Solarvalue still has an undefined Price to Earnings ratio.

Check out the promotional video or VIDEOCLIP on the Solarvalue website at http://www.solarvalue.com/content/index.html and click on the movie projector icon. Or here is a direct link, http://www.solarvalue.de/filme/008_master.swf, I got from the page source. I think the video is a bit over produced, and the soundtrack is a cross between The Terminator and Donald Trump’s The Apprentice “reality” TV program.

And thanks to the folks on the Solarvalue discussion board over at Wallstreet Online (http://www.wallstreet-online.de) for linking to my Blog posts. I appreciate the added Blog traffic.

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