GCL-Poly dilutes holding in developer business to raise funds

The poly maker yesterday secured approval from unpaid creditors to restructure the company’s debts and will commit the anticipated $115 million windfall from its shares placement towards its financial commitments.

The parent company will place 2 billion shares in its solar project operation.

Image: Photo by Annie Spratt on Unsplash

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Chinese polysilicon manufacturer GCL-Poly will dilute its stake in its GCL New Energy solar project development business as it continues to raise funds to pay down debt following a recent cross default.

The Elite Time Global Ltd subsidiary of GCL-Poly in which the parent holds its stake in the New Energy business, this morning announced plans to place 2 billion shares in the developer, with the HK$0.455 (US$0.06) share price set to generate a net HK$895 million (US$115 million).

That will see GCL-Poly's controlling interest in the developer fall from 58.94% to 53.34% of the enlarged business with the expected windfall to be used for “borrowings and for general corporate purposes.”

GCL-Poly defaulted on payment of US$500 million worth of Hong Kong-issued, three-year senior notes on January 30, triggering a cross default. The note holders yesterday committed to a debt restructuring which will postpone settlement of most of the monies owed for three years.

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As part of the fundraising effort, GCL shareholders today voted unanimously to approve the sell-off of 18 Chinese solar projects with a total generation capacity of 430 MW to state-owned entity China Huaneng for RMB2 billion (US$310 million). The sale will book a RMB183 million loss for GCL but will also remove RMB2.04 billion of liabilities from the seller's accounts.

This copy was amended on 10/02/21 to add details of the 18-project solar portfolio sale.

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