Freyr has completed the acquisition of Chinese firm Trina Solar’s Texas solar manufacturing assets, completing its transition from a European battery company to a US solar one.
Freyr announced on 24 December that it had closed its acquisition of Trina Solar’s 5GW solar module manufacturing facility in Wilmer, Texas.
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Energy-Storage.news covered the US$340 million purchase announcement on 6 November, the same day Donald Trump was declared to have won the presidential election.
At the time, Michael Parr, CEO of trade body The Ultra Low Carbon Solar Alliance, wrote on LinkedIn, “Looks like Trina is taking the risk of Congress cutting off access to the 45X manufacturing tax credit for Chinese companies seriously.”
For Freyr, the deal gives it an operational platform in the US clean energy industry after struggles to launch battery production in Europe. Battery manufacturing in Europe and the US has been the company’s focus since being founded in 2021 but it has faced major challenges, as previously covered on this site (Premium access article), and the European battery project now looks all but over.
A US$380 million deal
The total purchase amount for Trina’s facility consists of US$100 million of cash, US$50 million of repayment of an intercompany loan, a US$150 million loan note, 9.9% of Freyr’s outstanding common stock, and a US$80 million convertible loan note that converts to an additional 11.5% of Freyr’s outstanding stock after undisclosed conditions are met.
Those figures add up to US$380 million while the original transaction was slated at US$340 million. The increase may be related to the parts of the transaction that involve Freyr’s shares, which have increased substantially in value since the Trina deal was first announced (now at US$3.03 versus US$0.98 prior to the deal).
Freyr has also secured a commitment of US$100 million to issue preferred stock to funds and accounts managed by Encompass Capital Advisors. Of this amount, US$50 million in preferred stock has already been issued as part of this closing.
Additionally, US$14.8 million has been issued through a private placement of 7% of Freyr’s outstanding common stock to Chunyan Wu, a co-founder and significant shareholder of Trina Solar. Freyr has stated that the funds will be used for operational and working capital purposes.
The manufacturing facility commenced production on 1 November and is expected to be at full production by H2 2025. The company says an estimated 30% of production volumes are backed by firm offtake contractors with customers in the US.
Freyr plans to submit transaction documents in Q1 2025 in order to secure US regulatory consents from organisations such as the Committee on Foreign Investment in the United States (CFIUS).
Freyr also expects initial earnings before interest, taxes, depreciation, and amortisation (EBITDA) in 2025 of US$75-125 million, escalating to EBITDA of US$175-225 million at the close of 2025, before reaching annual run rate EBITDA of US$650-700 million.
The company says that creating this US solar production facility will solve a bottleneck for developers and create up to 1,800 jobs.
Daniel Barcelo, Freyr’s chairman of the board and CEO said of the acquisition: “Today is an exciting day for Freyr. The closing of this transaction marks the start of a new chapter for the company as we execute our strategic plan to build a US-based leader in the solar and storage markets.”
“We are grateful for the continued support of our shareholders, and we look forward to advancing our key objectives to create meaningful shareholder value and to enhance our competitive position in 2025, highlighted by the planned start of construction of our solar cell manufacturing facility and other project development opportunities that are emerging for FREYR and Trina to mutually pursue.”
Alongside manufacturing, Trina Solar also has a project development arm, lodging a planning application for a 500MW/1,000MWh battery energy storage system (BESS) in Victoria, Australia, in late-November 2024.
