GCL shareholders set for a busy festive period as votes loom on $903m worth of solar project sales

Shareholders in solar manufacturer and project developer GCL-Poly will decide on December 28 whether to approve a sale of 10 PV plants which will generate a net cash windfall of RMB1.38 billion (US$211 million).

The GCL New Energy business controlled by polysilicon manufacturer GCL-Poly is selling off its Chinese project portfolio to pay off loans and other borrowings of RMB7.16 billion which, it said at the end of June, fall due for payment halfway through next year.

The 10-project sale, which concerns 403 MW of generation capacity, to be voted on at a special general meeting this month, is the second phase of a proposed project sell off to two funds belonging to state owned entities China Huaneng, an electric utility, and the Industrial and Commercial Bank of China (ICBC).

The phase two deal, if approved, will amount to a book loss of RMB205 million (US$31.1 million) for GCL but will generate a net RMB1.38 billion and take RMB1.81 billion off the company's liabilities – RMB380 million of which is listed in that short term loans-payable column.

The first phase of the Huaneng/ICBC sale related to seven solar farms with a total 294 MW of generation capacity, to generate net cash of RMB1.08 billion and take RMB2.66 billion of liabilities off the books.

A proposed third phase of the deal, announced last month, would add another 18-project, 430 MW capacity slice to the transfer, generating a further net RMB2 billion and taking another RMB2.04 billion off the books.

If, as expected, shareholders waive through the sales, GCL will bank RMB4.46 billion from the two funds, which are 51% owned by China Huaneng and 49% by ICBC, wiping out RMB6.51 billion of liabilities by selling 35 PV projects with a generation capacity of 1,127 MW.

With stakeholders also set to approve a separate, two-phase sale of 677 MW of project capacity to another state-owned body – Xuzhou State Investment and Environmental Protection Energy Co Ltd – for RMB1.45 billion, and the removal of RMB1.87 billion of liabilities, state enterprizes are set to hand over more than RMB5.91 billion towards paying off GCL's immediate debt pile.

And the state can add a further RMB211 million to the bill, after a GCL subsidiary on Friday announced the sale of a 50 MW project to state-owned solar developer Beijing United Rongbang. That transaction will net the seller RMB202 million and remove RMB392 million of liabilities and, unusually, represents a book profit of RMB46 million for GCL. There is also the possibility of a further RMB9.29 million from the state-owned buyer if the solar project receives the RMB92.9 million of subsidies it is owed by Beijing during the transition period for the sale.

This copy was amended on 07/12/20 to add details of the sale to Beijing United Rongbang.