Good news for SQN as Suniva wins trade case – SQN Asset Finance Income Fund Limited has published an update on its announcement on 19 April 2017 with regard to SQN’s holding in Suniva Inc., the U.S. based solar cell and module manufacturer.
In August 2015, SQN entered into a 5-year financing arrangement with Suniva that was secured by its manufacturing and production equipment and supported by a parental guarantee from a Hong Kong-listed public company. In the NAV as at 30 August 2017, being the last published NAV, the amount outstanding to the Company was $29.9m (£24.3m), which represented approximately 6.8% of the ordinary share class. The Suniva investment is not held by the C shares.
Today, the United States International Trade Commission (“ITC”) rendered its decisions on Suniva and Solar World’s petition under Section 201 of the Trade Act of 1974, seeking protection for the solar manufacturing industry in the United States. Consistent with the data collected and the presentations made by Suniva and Solar World at the hearing on 15 August 2017, the ITC has found that substantial damage has been caused to the U.S. solar manufacturing industry by the overcapacity of foreign imports. Therefore, the ITC will be making a recommendation to the White House to provide protection for U.S. solar manufacturers by 13 November 2017.
The ITC has set a hearing date of 3 October 2017 to hear arguments for and against the remedies being proposed by Suniva and Solar World. It is anticipated that this will be a very public campaign by those opposed to the ITC’s ruling, in an effort to influence the decision-makers in this process from now until the time of the White House’s ruling.
The board says that, should Suniva be granted a form of the remedies it has proposed, they expect that profitable operations will recommence in early 2018.
SQN Asset Finance spent $4.0m in legal fees and other costs (0.83 % of the ordinary shares’ assets) on this case.
The board say that this is encouraging news for SQN as it sets the stage for multiple outcomes that can result in a full recovery of the investment, interest due and the legal fees. The board will continue to provide updates as they are publicly available.
SQN : Good news for SQN as Suniva wins trade case