Canadian Solar Inc. has filed an application with the U.S. Securities and Exchange Commission for a proposed initial public offering of shares of a Yieldco vehicle.
The number of shares to be sold and the price range for the proposed offering have not yet been determined. The initial public offering is subject to the SEC review process, market and other conditions.
A Yieldco typically provides power under long-term contracts and pays out a portion of its cash flow to shareholders. The benefit of this arrangement is that the Yieldco can have access to cheap funding.
Canadian Solar had first mooted the idea of a Yieldco back in March. “ We have been reviewing various options to structure and potentially list our downstream business, and we are now planning to form a YieldCo vehicle, in order to maximize value creation for our shareholders over the long-term,” Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar said then. “We expect that a YieldCo vehicle and its subsequent listing would enable us to capture the value inherent in our large pipeline of long-term contracted assets and to recycle capital.