November 21 (Renewables Now) - State-owned China Taiping Insurance Group Ltd plans to buy a stake of not more than 30% in solar company GCL New Energy Holdings Ltd (HKG:0451), or GNE, for about HKD 8 billion (USD 1.02bn/EUR 872m).
The investment is stipulated in a newly-signed, non-legally binding cooperation framework agreement between Taiping Financial Holdings and GCL New Energy, which is currently controlled by solar products maker and project developer GCL-Poly Energy Holdings Ltd (HKG:3800) with a stake of 62.28%.
Under the terms of that agreement, Taiping Financial Holdings will create an investment fund with a size of about HKD 8 billion. The said fund will make the investment in GNE by subscribing to shares and convertible bonds at a price that is a 10% discount to the average closing price of the GNE shares on the Hong Kong Stock Exchange for the 10 trading days immediately preceding the agreement.
The transaction is pending the completion of due diligence and is also subject to other conditions, including certain approvals. Taiping Financial Holdings has agreed not to make a general offer for GNE securities following the investment.
The move will allow GNE to raise a substantial amount of additional funds, enhance its shareholder base, improve its financial and liquidity position, and secure the financial flexibility needed for future business development, a bourse statement says.
GNE is principally engaged in the development, construction, operation and management of solar power plants.
(HKD 1.0 = USD 0.128/EUR 0.109)