Suntech

Powering growth

Region: East Asia, China Investment date: 2005 Sector: Private Equity Exit date: 2007 Deal type: Replacement capital Status date: Realised

Suntech develops, manufactures, and delivers solar energy solutions. It uses R&D and customer-centric innovations to produce crystalline silicon solar cells, modules and photovoltaic (‘PV’) powered products. Suntech exports the majority of its products to international markets, mainly Europe, and has supplied more than 8 GWs photovoltaic panels to over 1,000 customers in more than 80 countries.

Actis invested in Suntech in 2005, as the demand for solar technologies was being fuelled by increasing recognition among governments of the need to move towards renewable forms of energy.

Suntech needed to expand its business to become an international player and restructure for an offshore listing. It also needed to raise funds to buy out the state-owned shareholders, strengthen its shareholder base and raise its profile.

Actis’ investment formed part of a larger transaction, raised through other investors, including Goldman Sachs and Natexis. Timing was critical: Suntech needed to move quickly. Actis’ experience of executing these types of transactions enabled us to respond quickly to Suntech’s needs and the deal was completed in four weeks. After the IPO, Suntech rose to eighth position (from tenth) in the global PV producers ranking, and a further boost to its production capacity earned it a third place in 2006.

Post-listing, Actis worked with Suntech to improve corporate governance and financial reporting, recruit a CFO and explore opportunities in new markets where Actis has a presence, such as Africa and Latin America. Suntech’s economic performance grew strongly during Actis’ involvement: between 2005 and 2007 turnover increased by almost 1500% and employment by 400%.

The company’s visibility was enhanced through its involvement in public projects: in 2006 it won the contract to be the sole provider of solar power for Beijing Bird’s Nest Stadium, which hosted the Olympic Games in 2008.

By the time of Actis’ exit in 2007 Suntech was established as a leading global photovoltaic manufacturer with sales partners in four continents.