ReneSola announced a ratio change for the company's American Depositary Receipt (ADR) program on January 30. As a result, the number of the company's shares represented by each American Depositary Share (ADS) will be changed from two shares to 10 shares (the "Ratio Change"). The ADR effective date of the Ratio Change is expected to be February 10, 2017.
To effect this Ratio Change, ADS holders will be required to exchange their existing ADSs for new ADSs on the basis of one new ADS for every five existing ADSs surrendered. No fractional ADSs will be issued. Instead, the Company's depositary, The Bank of New York Mellon (the "Depositary"), will aggregate fractional ADSs and attempt to sell such ADSs in order to distribute any cash-in-lieu proceeds, net any fees, to ADS holders. Further notice will be provided by the Depositary.
For ReneSola's ADS holders, this Ratio Change will have the same effect as a one-for-five reverse split. No new shares will be issued in connection with the Ratio Change and ReneSola's ADSs will continue to be traded on the New York Stock Exchange under the symbol "SOL."
The Ratio Change will affect all ADS holders uniformly. The Ratio Change will not reduce any ADS holder's percentage ownership interest in the Company, except for minor adjustments that may result from the treatment of fractional ADSs. Proportionate voting rights and other rights and preferences of the ADS holders will not be reduced by the ratio change (subject to the treatment of fractional ADSs).
The Ratio Change is aimed to bring the price of the ADSs into compliance with the continued listing standards of New York Stock Exchange, which requires an average closing price of the company's ADSs of not less than $1.00 per ADS over a consecutive 30-trading-day period. As a result of this Ratio Change, the ADS price is expected to automatically increase proportionally, although the company can give no assurance that the post-change ADS price will be equal to or greater than the pre-change ADS price multiplied by five.