UPDATE - GCL Poly seals USD-502m non-solar disposal deal

Chinese firm GCL-Poly Energy Holdings Ltd (HKG:3800) has officially agreed to sell its non-solar power business for CNY 3.2 billion (USD 502m/EUR 444m) in cash, after which it will focus solely on its core solar segment.

Through its unit Hank Rich Ltd, the company signed a sale and purchase agreement with Shanghai Qichen Investment Management Co Ltd, says a statement on Monday. As part of the deal, Shanghai Qichen Investment will acquire the owner of 17 operational co-generation power plants, two incineration facilities and one wind park with a combined attributable installed capacity of 843.8 MW. The target also has a 360-MW cogeneration plant and one 36-MW incineration facility under construction, and a pipeline of projects under development.

GCL Poly explained that the move follows significant fluctuations in the earnings before interest, tax, depreciation and amortisation (EBITDA) of its non-solar business over the past few years, caused by a drop in utilisation hours of thermal power plants in China and falling prices. Following the disposal, the company will engage chiefly in the manufacturing and sale of polysilicon and wafers, as well as in the development, ownership and operation of solar photovoltaics (PV) farms at home and overseas.

Completion of the transaction will take place following the fulfillment of all conditions precedent, which include obtaining shareholders’ and governmental approvals, the firm noted.

(CNY 1.0 = USD 0.157/EUR 0.139)

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