Xantrex and Shanghai Electric form joint venture

Canadian power inverter maker Xantrex (TSX: XTX) is up 5% today on news, issued after the close of the market yesterday, that it has entered into an agreement to form a joint venture for the Chinese market.

The company will join forces with Shanghai Power Transmission & Distribution Co. (SPTD) to make and sell solar and wind power inverters for the renewable energy market in China from a facility to be built in Shanghai.

"The establishment of this joint venture ... is an important milestone in creating a strong presence for Xantrex in China," said Mossadiq Umedaly, Xantrex's Chairman. "The renewable energy market in China, which has the potential to be very large, is integral to our long-term growth plans, and Shanghai Electric is a resourceful and strategically attractive partner."

The venture, to be owned 49% by Xantrex and 51% by SPTD, will be known as Shanghai Electric Xantrex Power Electronics Co. The total initial investment will be $20 million USD and the new entity will have a registered capital of $10 million USD.

The venture is expected to receive final approval from the Chinese government in the next few weeks.

China's new Renewable Energy law has made one of the largest state-sponsored commitments toward renewable energy by requiring 15 percent of the country's energy mix to be from renewable energy sources by the year 2020.

Xantrex is a leader in the development, manufacturing and marketing of advanced power electronic products and systems for the renewable, portable, mobile, and programmable power markets.

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