GT Solar to offer 25m shares

Monday, January 10, 2011

GT Solar International has announced a secondary offering of 25 million shares – an amount expected to raise about $150 million – an announcement made shortly after the company announced it had won about $200 million in contracts.

Despite the offering -- the first following the company’s $500 million initial public offering in July 2008 – a holding company created by the company’s founders will retain a majority stake in the Merrimack, N.H.-based maker of furnaces and equipment used to create solar wafer cells.

GT Solar Holdings LLC -- a holding company consisting of GFI Energy Ventures LLC, a private equity investment firm focused on the energy sector, and Oaktree Capital Management LP, a global alternative and non-traditional investment manager – will still own somewhere between 53.4 percent and 56.1 percent of the company, depending on whether the underwriter exercises its over-allotment option to purchase some 3.75 million of additional shares.

The 25 million shares represent about 17.4 percent of GT Solar’s outstanding shares.

A date and exact price of the IPO has not been set, but the stock closed at the end of last week at $5.95 a share. The price per share fell Monday to $5.56, down 39 cents.

GT Solar was launched in 1994 in the basement of Kedar Gupta and John Talbott and quickly became a success story, attracting private equity in 2006. The firm expanded rapidly even before going public, with sales growing from $60 million in the fiscal year ending March 31, 2007, to $540 million for the fiscal year ending March 28, 2009, when it raked in $88 million in profits.

Last week, the company announced some $200 million in new contracts, including a $137 million follow-on order from a large Chinese firm. The orders were booked in GT Solar’s fourth fiscal quarter, with much of the revenue expected to be recognized the following year.

Still, GT Solar has struggled to gain the confidence of the investment community. Its share price sharply dropped from the original $16.50 asking price after a competitor revealed the day after the IPO that it had snagged a major contract from GT Solar’s largest customer. A number of class actions suits followed – they are now in the discovery phase in U.S. District Court in New Hampshire as well as New Hampshire’s new Business Court. The solar sector in general also has suffered in the wake of cheap energy prices. – BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW

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