GCL-Poly to offload non-solar business for $503m

Share

Hong Kong-based polysilicon producer GCL-Poly Energy Holdings Ltd. has revealed this week that it is to relinquish all of its non-solar related assets to focus solely on the production of solar products.

Data from GCL-Poly’s 2014 financial reports showed that the company generated 68% of its revenue for the year ended December 31 from the solar business, which includes the production of polysilicon and wafers used to manufacture solar cells.

Having suffered a fall in first-half profits this year – caused by a global supply glut of polysilicon serving to suppress product prices – the company evidently believes it can increase its profits by focusing solely on solar activities.

To that end, GCL-Poly has lined up the sale of all interests and subsidiaries not involved in the development or production of solar products to Jiangsu Golden Concord Energy Co. for a reported sum of 3.2 billion yuan ($503 million).

Once the sale has been completed, GCL Poly will switch its chief focus to the continuation of its polysilicon and wafer production, as well as augmenting its operations in developing downstream solar projects both within China and globally.

As part of the sale arrangement, GCL Poly will relinquish the entire stake in 17 operational cogeneration power plants, one wind power facility and two incineration plants. Collectively, these assets boast a combined installed power capacity of 843.8 MW.

Upon announcing details of the sale, GCL-Poly’s shares rose 6.8% – the company’s largest one-day gain since August 27.