Tantech Holdings Ltd (NASDAQ:TANH)
Chinese clean energy firm Tantech Holdings Ltd (NASDAQ:TANH) has disclosed that it has signed a securities acquisition deal with a number of institutional investors. Shares of Tantech Holdings consequently fell by 32.94%. Under terms of the deal, Tantech Holdings will receive $6.5 million in a direct placement. Each common share will be priced at $3.45 and investors will be issued 1,891,307 shares. Additionally, investors will also receive warrants which will allow them to acquire 945,655 common shares at $4.25 a share.
Tantech Holdings Ltd (NASDAQ:TANH) will use the proceeds of the offering for general corporate purposes. It is expected that the placement could be completed on September 29, 2017 if customary closing conditions are met.
Tantech Holdings Ltd (NASDAQ:TANH)’s securities purchase agreement comes barely over a week since the Chinese clean energy firm announced that its motor vehicle subsidiary had obtained $20 million in sales contracts for electric buses and vans.
“This new sales contract, along with the recent MIIT approval of two of our EV models, laid a solid foundation for us to gain market share in the fast growing Chinese EV segment,” said the Chief Executive Officer and chairman of Tantech Holdings Ltd (NASDAQ:TANH), Zhengyu Wang.
The sales contracts are for the purchase of 10 electric buses and 450 electric. Tantech also revealed that the buyer had made a deposit in order to lock in the price. The buyer will also be required to pay about 30% of the sales price November 2, 2017. The balance is to be paid upon delivery which is expected before the end of this calendar year.
Both the electric van and the electric bus have received the approval of the Chinese authorities. The van, suited for tourist uses and airport transportation, has a capacity of 34 passengers while the bus is suited for urban transportation and has a capacity of 46 passengers. Both the electric bus and the electric van possess a driving range of 155 miles or 250 kilometers on a single charge.
The Chinese motor vehicle market is enormous and growing at a fast rate. Last year more than 28 million automobiles were sold and this number is expected to rise to an annual figure of 40 million motor vehicles within three years. This rapid growth has led to massive air pollution that is associated with internal combustion engines and the government has been keen to respond by developing the electric car sector.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.