LDK Solar Co., Ltd. - Asia Europe Clean Energy (Solar) Advisory Co ...

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DILUTION If you invest in our ADSs, your interest will be diluted to the extent there is a difference between the initial public offering price per ADS and the net tangible book value per ADS after this offering. Our net tangible book value as of March 31, 2007 was approximately $178.5 million, or $2.38 per ordinary share and $2.38 per ADS. We have calculated our net tangible book value per ordinary share by dividing our net tangible book value by the number of outstanding ordinary shares. We have determined our net tangible book value by subtracting the value of our intangible assets and total liabilities from our total assets. We have calculated dilution by subtracting our pro forma as adjusted net tangible book value per ordinary share as of March 31, 2007 from the initial public offering price per ordinary share. In arriving at the number of ordinary shares to calculate dilution, we have assumed the automatic conversion of all of our outstanding Series A, Series B and Series C preferred shares into ordinary shares that will occur upon the completion of this offering. Without taking into account any other changes in our net tangible book value after March 31, 2007, other than to give effect to: ‚ the automatic conversion of all of our outstanding Series A, Series B and Series C preferred shares into 15,580,000 ordinary shares upon the completion of this offering, and ‚ our issuance and sale of 13,392,100 ordinary shares in the form of ADSs in this offering at the initial public offering price of $27.00 per ADS, after deduction of the underwriting discounts and commissions and estimated aggregate offering expenses payable by us and assuming no exercise by the underwriters of their over-allotment option and no other change to the number of ADSs sold by us as set forth on the cover page of this prospectus, our pro forma as adjusted net tangible book value as of March 31, 2007 would have been approximately $514.7 million, or $4.95 per ordinary share and $4.95 per ADS. This represents an immediate increase in net tangible book value of $2.98 per ordinary share or $2.98 per ADS to our existing shareholders and an immediate dilution in net tangible book value of $22.05 per ordinary share or $22.05 per ADS to you and other purchasers of our ADSs in this offering. The following table illustrates this dilution effect: Initial public offering price per ordinary share ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $27.00 Net tangible book value per ordinary share as of March 31, 2007 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2.38 Pro forma net tangible book value per ordinary share before this offering as of March 31, 2007, assuming automatic conversion of all of our outstanding Series A, Series B and Series C preferred shares ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1.97 Increase in net tangible book value per ordinary share attributable to price paid by you and other new investorsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2.98 Pro forma as adjusted net tangible book value per ordinary share after giving effect to this offering ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4.95 Dilution in net tangible book value per ordinary share to you and other new investors in this offering ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 22.05 Dilution in net tangible book value per ADS to you and other new investors in this offering ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $22.05 36
The following table summarizes, on a pro forma basis as of March 31, 2007, the differences between our existing shareholders and the new investors, including you, in this offering with respect to the number of ordinary shares (including ordinary shares underlying the ADSs) purchased from us, the total consideration paid and the average price per ordinary share paid before deducting the underwriting discounts and commissions and estimated aggregate offering expenses payable by us. The total number of ordinary shares does not include ordinary shares underlying the ADSs issuable upon the exercise of the over-allotment option granted to the underwriters. Average Price per Average Ordinary Shares Ordinary Price per Purchased Total <strong>Co</strong>nsideration Share ADS Number % Amount % $ $ (in thousands, except per share and per ADS data and percentages) Existing shareholdersÏÏÏÏÏÏÏ 90,580 87.1% $ 93,000 20.5% $ 1.03 $ 1.03 New investorsÏÏÏÏÏÏÏÏÏÏÏÏÏ 13,392 12.9 361,587 79.5 27.00 27.00 Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 103,972 100.0% $454,587 100.0% $ 4.37 $ 4.37 The discussion and the table above assume automatic conversion of all of our Series A, Series B and Series C preferred shares into ordinary shares upon completion of this offering and are based on the number of our ordinary shares and Series A, Series B and Series C preferred shares outstanding or assumed to be outstanding as of March 31, 2007, excluding ordinary shares reserved as of March 31, 2007 for issuance upon the exercise of stock options that we have granted and may grant in the future pursuant to our 2006 stock incentive plan. As of March 31, 2007, we had options outstanding to purchase a total of 8,159,800 ordinary shares at a weighted average exercise price of $5.60 per ordinary share. These stock options did not include stock options to purchase 172,100 ordinary shares that have been forfeited subsequent to their grant dates due to termination of employment for cause. On April 17, 2007, we granted to Gang Wang, one of our directors, options to purchase 100,000 of our ordinary shares at the exercise price of $9.00 per share. On April 17, 2007, we also authorized options to be granted to our employees to purchase 350,900 ordinary shares at the exercise price of $25.00, the low end of the price range for this offering as shown on the cover of the preliminary prospectus, and options to purchase 100,000 ordinary shares at the exercise price of $9.00 to be granted to Mr. Louis T. Hsieh, who becomes one of our directors on the date of this prospectus. To the extent that any of the outstanding stock options are exercised, there will be further dilution to you and other new investors. If all of the outstanding options had been exercised on March 31, 2007, after giving effect to this offering, our pro forma as adjusted net tangible book value would have been approximately $571.0 million, or $5.07 per ordinary share and $5.07 per ADS, and the dilution in net tangible book value to you and other new investors would have been $21.93 per ordinary share and $21.93 per ADS. 37
Page 1: PROSPECTUS 17,384,000 American Depo
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Page 6 and 7: We were incorporated in the Cayman
Page 8 and 9: percentage of light energy from the
Page 10 and 11: Listing ÏÏÏÏÏÏÏÏÏÏÏÏÏ
Page 12 and 13: (1) Gross profit for the year ended
Page 14 and 15: RISK FACTORS Investment in our ADSs
Page 16 and 17: Reduction or elimination of governm
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Page 24 and 25: Compliance with environmental regul
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Page 28 and 29: tax rates and other measures. Forei
Page 30 and 31: company in connection with any incr
Page 32 and 33: of approximately $22.05 in the net
Page 34 and 35: outside the United States. As a res
Page 36 and 37: The forward-looking statements cont
Page 38 and 39: CAPITALIZATION The following table
Page 42 and 43: DIVIDEND POLICY We have never decla
Page 44 and 45: SELECTED CONSOLIDATED FINANCIAL AND
Page 46 and 47: MANAGEMENT'S DISCUSSION AND ANALYSI
Page 48 and 49: polysilicon prices will decline in
Page 50 and 51: listed public company in the United
Page 52 and 53: increase. See ""Risk Factors Ì Ris
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Page 58 and 59: value of the our business. Under th
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Page 66 and 67: For additional information relating
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Page 72 and 73: module production will increase fro
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Page 76 and 77: Because we are a pure-play solar wa
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On September 21, 2006, the CSRC pub
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Gang Wang is a non-executive direct
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directors on our audit committee wi
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monies of or belonging to us may be
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(10) Vests on July 31, 2007. Brilli
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Securities (USA) LLC, which is a re
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interest-bearing loans directly to
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person, by its duly authorized repr
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History of Securities Issuances The
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persuasive authority in the Cayman
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making any sale by public or privat
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Reports and Other Communications Wi
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Amendment and Termination How may t
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‚ deliver distributions on any AD
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SHARES ELIGIBLE FOR FUTURE SALE Upo
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TAXATION The following summary of m
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individual, up to $3,000 of capital
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person and on sales of ordinary sha
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The estimated offering expenses pay
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Pricing of the Offering Prior to th
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ADS with a view to selling it to th
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EXPENSES RELATING TO THIS OFFERING
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‚ no new admissible evidence rele
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WHERE YOU CAN FIND ADDITIONAL INFOR
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REPORT OF INDEPENDENT REGISTERED PU
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LDK SOLAR CO., LTD. AND SUBSIDIARIE
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