GCL to sell majority stake in 977-MW Chinese solar portfolio

GCL-Poly Energy Holdings Ltd (HKG:3800) and its majority-owned unit GCL New Energy Holdings Ltd (HKG:0451), or GNE, have agreed to sell controlling stakes in 19 Chinese solar power plants with a total capacity of 977 MW.

GCL-Poly said in a bourse statement that this agreed transaction is part of GNE’s decision to pursue an asset-light model.

A vehicle majority-owned by investment fund Ningbo Rongshang Investment Partnership is buying 70% stakes in seven firms that own the solar parks for an aggregate cash consideration of CNY 1.74 billion (USD 251.5m/EUR 226m). The transaction also covers 70% of a shareholder’s loan to the projects.

The buyer plans to explore other cooperation opportunities involving GNE solar power plants in China.

Including the payment of outstanding dividends, the net proceeds from the newly agreed transaction are estimated at CNY 2.06 billion and will be used to repay debt at GNE. The transaction itself is expected to reduce the liabilities of GNE and GCL-Poly by some CNY 5.8 billion.

Another unit of both GNE and GCL-Poly will provide operation and maintenance (O&M) services to the solar portfolio that is subject to the stake sale agreement. The O&M contract has a term of three years.

(CNY 1.0 = USD 0.145/EUR 0.130)

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