June 24, 2009 (FinancialWire) — A-Power Energy Generation Systems, Ltd. (NASDAQ: APWR) has closed an offering of $40 million of senior convertible notes, plus warrants, to several institutional investors.

The notes will mature in five years and will be initially convertible at $10.637 per common share. The notes will bear interest at an annual rate increasing over time from 3% to 12%. The company also issued five-year warrants, which will be exercisable for an aggregate of 1,504,184 common shares of A-Power Energy at an initial exercise price of $10.637 per share.

A-Power Energy Generation said it will use the net proceeds from the placement to secure components for A-Power’s ramp-up in its wind turbine assembly business.

Shenyang, China-based A-Power Energy Generation Systems is a provider of distributed power generation systems in China, focusing projects of 25 megawattts to 400MW.

In 2008, A-Power entered the wind energy market and has built a wind turbine manufacturing facility located in Shenyang, Liaoning Province, with technologies licensed from German Fuhrlander AG and Denmark-based Norwin, and a total annual production capacity of 1,125 megawatts.

In March 2009, A-Power entered into an agreement to establish a joint venture partnership with GE Drivetrain Technologies to produce wind turbine gearboxes in Shenyang. A-Power also has relationships with Tsinghua University in Beijing and the China Academy of Sciences in Guangzhou to develop and commercialize other renewable energy technologies.

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