GCL Poly secures more public backing with second investment fund deal

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Chinese polysilicon maker GCL Poly appears to have secured another slew of public funds to help upgrade its poly production lines.

In an announcement made to the Hong Kong Stock Exchange yesterday afternoon, GCL reported its GCL-Poly Suzhou New Energy Co Ltd subsidiary had entered an agreement to contribute to a RMB4-5 billion ($597-747 million) investment fund.

The parent company said the agreement, which was signed last Friday, was entered into with the Leshan Municipal People’s Government and with the Shanghai Zhongping Guohao Assets Management Co.

GCL Poly stated the details of how much each partner would contribute to the investment fund were yet to be finalized but disbursements from it would help upgrade the company’s polysilicon making facilities at subsidiary Jiangsu Zhongneng Polysilicon Technology Development Co Ltd and would also supply an “improvement of Jiangsu Zhongneng’s cashflow”.

The stock market update added, the fund would also invest in and help manage the new silicon production base to be developed in the city of Leshan, in Sichuan province.

The announcement comes hot on the heels of a similar deal inked by a GCL Poly subsidiary in Xuzhou, which saw the GCL unit agree to contribute RMB1.35 billion of a RMB3.35 billion investment fund in order to leverage access to the remaining 60% of the pot for production line upgrades, with at least part of the balance coming from public funds.