Subject: Announcement of Termination of Polysilicon Manufacturing Operations of Motech Industries Inc.’s (the “Company’) Investee Company, AE Polysilicon Corporation.
Date of events:2012/05/28
1.Date of occurrence of the event:2012/05/28
2. Name of the company: Motech Industries, Inc.
3.Relationship to the Company (please enter "head office" or "affiliate company"):The Company
4.Reciprocal shareholding ratios: N/A
5.Cause of occurrence: Due to a drastically changing solar industry environment and a lack of economies of scale, AE Polysilicon Corporation (“AEP”), an investee company of the Company, had decided to cease polysilicon production, despite numerous efforts to improve the price competitiveness of its products. To protect the rights and interests of AEP’s creditors and shareholders, the board of directors of AEP had adopted a resolution to undertake measures, including initiating workforce reductions, proceeding with a safe-shutdown of its manufacturing facilities, and conducting an asset sale. The asset sale proposal is pending approval by the stockholders of AEP. The Company is making this announcement as these latest developments at AEP may have a material impact on the stockholders’ rights and interests of the Company.
6. Countermeasures: As of Apr 30, 2012, the Company’s financial exposure in AEP totaled approximately US$ 41 million, consisting of investments of approximately US$ 26 million and a prepayment of US$ 15 million. The Company is going to conduct impairment testing according to ROC SFAS No. 35, “Accounting for Asset Impairment”. Should the fact of impairment arise, the losses will be reflected in the Company’s 2Q’12 financial statements.
7.Any other matters that need to be specified: N/A