Another day, another dollar. Following yesterday's news that Chinese poly giant and solar developer GCL Poly was channeling a RMB990 million ($143m) public subsidy windfall towards the RMB21.4 billion portion of its debts that fall due in July, there has been further modest progress.
In another update this afternoon to the Hong Kong exchange where it is listed, GCL revealed its Suzhou GCL New Energy subsidiary has sold off 80% stakes in two previously wholly owned solar developments with a combined 160 MW capacity.
The sale of stockholdings in Huarong GCL New Energy and Linzhou Xinchuang – which was a subsidiary of the group's Henan GCL New Energy unit – after trading hours yesterday is expected to raise a net RMB306m, provided the two developments continue to produce electricity at the advertised rate and continue to generate public subsidies. Suzhou GCL will retain a 20% stake in each project and will continue to provide operations and maintenance services.
Not surprisingly, GCL will devote the income to paying off debts.
Perhaps most significant for the seller, is that purchaser CGN Solar – 51% owned by the China General Nuclear Power Company and 49% by Shenzhen CGN Wind and Solar Investment Company Ltd – “will further explore other co-operation opportunities, including but not limited to the Group’s existing photovoltaic power projects in the PRC [People's Republic of China]”.
With a debt mountain that stood at RMB61.3bn at the end of June, according to GCL figures, another slew of PV project asset sales could prove very handy.