China Huaneng to acquire 294 MW of GCL New Energy projects

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State-owned China Huaneng Group appears to have decided which parts of solar project developer GCL New Energy’s project portfolio it wants to acquire.

The Hong Kong unit of the Chinese electric utility in November walked away from a proposed bail-out of the project development business owned by polysilicon manufacturer GCL-Poly, instead announcing an intent to cherry-pick project assets.

GCL New Energy and its parent today revealed two China Huaneng funds will acquire seven project companies with around 294 MW of Chinese solar generation capacity between them from the heavily-indebted developer.

Double benefit

The transaction will be worth a net RMB1.08 billion (US$156 million) to GCL New Energy and will also remove RMB2.66 billion of liabilities from the strained finances of the developer and the GCL-Poly parent which holds a 62.28% stake in it.

The deal will be subject to shareholder approval by GCL New Energy and its parent and both boards announced today details of the shareholder votes necessary will be published within 15 working days. That period will stretch to February 18 with the week-long Chinese new year festivities set to start on Friday.

With GCL New Energy stating the anticipated windfall will be used to pay down debts, it was keen to stress in its latest update to the Hong Kong Stock Exchange that further acquisitions of its assets may be made by China Huaneng.