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China Sunergy Planning to Triple ADR Ratio to Drive Up Price

Dec. 6 (Bloomberg) -- China Sunergy Co., a maker of solar cells and modules, will boost the price of its American depositary receipts by making them worth more of its underlying shares.

The company will triple the number of ordinary shares an ADR is worth to 18 from six, Nanjing-based China Sunergy said today in a statement.

The move is similar to a reverse split, when a company consolidates inexpensive stock to have fewer outstanding shares with a higher price, said Daniel Ries, an analyst with Collins Stewart LLC in New York.

“It’s a very small company within the Chinese solar market, and it lacks some of the cost advantages its larger competitors get through scale,” Ries said today in a telephone interview. “They’re trying a superior-technology strategy, but it’s a very tough market right now.” He has a “neutral” rating on the company’s ADRs.

The price of China Sunergy’s ADRs “is expected to automatically increase proportionally” because of the new ratio, the company said in the statement. The change will take effect Dec. 21.

China Sunergy’s ADRs fell 7.3 percent to 64 cents at the close in New York. They’ve dropped 85 percent this year.

To contact the reporter on this story: Justin Doom in New York at jdoom1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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