Yingli announced on April 23rd that its wholly-owned subsidiary, Fine Silicon Co., Ltd., has signed a definitive agreement with the Land Reserve Centre of Baoding National High-tech Industrial Development Zone for sale to the Reserve Centre land use rights to a piece of land held by Fine Silicon currently not in active use and the attachments thereon.
The Land has a total site area of 524,464 square meters and was originally acquired for expansion of the Company's in-house polysilicon production capacity. The Land and the attachments thereon have not been put into active use since the Company changed its plan with respect to in-house polysilicon production. The Company does not expect sale of the Land and the attachments thereon will have any negative impact on its business operation. The Company understands that the Reserve Centre's decision to acquire the Land was in accordance with the local government's plan to rezone the area where the Land is located for non-industrial use.
The aggregate purchase price that the Reserve Centre agreed to pay Fine Silicon for land use rights to the Land and the attachments thereon is RMB 588.2 million, which was agreed upon by both parties based on valuation reports issued by third-party appraisal firms. The Reserve Centre has paid to Fine Silicon RMB 500 million as of April 23rd, 2015. Remainder of the purchase price will be paid within 30 days after the Reserve Centre re-sells the land use rights to the Land to a third party.
"The purchase by the Reserve Centre of the land will benefit the local government's plan to rezone the area for commercial use and strengthen our overall cash flow", commented Mr. Miao Liansheng, Chairman and Chief Executive Officer of Yingli Green Energy. "It will also help us to fulfill our debt paying obligations."