Ascent Solar Technologies Inc., a thin-film panel producer that’s lost 64 percent of its value this year, climbed the most in more than four years after announcing a licensing and equity deal that may help it increase sales in the Asian construction industry.
Ascent climbed 48 cents, or 65 percent, to $1.21 in Nasdaq Stock Market trading, the Thornton, Colorado-based company’s biggest gain since March 2007.
The company agreed to license its manufacturing technology to TFG Radiant Group, a joint venture of the Chinese construction and real estate company Radiant Group and the Singapore-based investment company Tertius Financial Group. The deal gives Ascent funds to expand manufacturing in the U.S. and a partner that will help it to pursue the building-integrated photovoltaic market in Asia, said Adam Krop, an analyst at Ardour Capital Partners in New York.
“They were facing a difficult market overall and this should give them more firepower to gain traction” in the building-integrated solar industry, Krop said today in an interview. Krop has a “hold” recommendation on Ascent and a $1.50 price target.
20 Percent Stake
TFG purchased 6.4 million Ascent shares for $1.15 each, 20 percent of the total shares outstanding. It has an option to acquire 9.5 million additional shares for $1.55 if certain conditions are met.
TFG plans to build a solar manufacturing plant in China based on Ascent’s copper, indium, gallium, diselenide, or CIGS, technology and has exclusive right to sell the panels in China, Taiwan, Hong Kong, Malaysia, Indonesia, Thailand, Korea and Singapore.
Ascent retains rights to sell its panels in other countries and will build a production facility in Colorado. It will have partial ownership of the TFG solar plant and will receive consulting fees and royalties from its Chinese partner. Ascent estimated the value of the agreement at more than “$250 million over multiple years,” it said today in a statement.
Most thin-film solar companies are “small and need capital to get to volume,” Ascent Chief Executive Officer Ron Eller said today in an interview. “I think we are going to answer that question differently by going to a licensing model.”
Ascent announced a strategy shift in March to focus on specialty markets such as military and defense, near-space applications, off-grid charging in developing countries and the integration of its panels on the rooftops of buses, trucks and trains.
The TFG partnership will give it an additional focus. “The company now has two major anchors and two major leaders in the building materials industry,” Ashutosh Misra, Ascent’s senior vice president of corporate development, said today in an interview.