GCL shareholders to vote on further 670 MW of project sales

The great GCL-Poly solar project sell-off is set to continue next month with shareholders to vote on the divestment of another 672 MW of Chinese project capacity to generate around RMB2.05 billion ($320 million) to help pay down a RMB16.9 billion ($2.64 billion) short-term debt pile.

With the details of a deal to sell 183 MW of solar capacity to two state-owned entities for a projected RMB660 million ($103 million) windfall having already been announced, polysilicon manufacturer GCL yesterday outlined details of a plan to sell five more projects to a different public body.

The company had already published details of a sale of five solar farms with a total generation capacity of 183 MW to Guangdong Jinyuan New Energy Co Ltd and State Power Investment Corp Guizhou Jinyuan Weining Energy Co Ltd. That deal, which will book a RMB50 million ($7.8 million) gain if approved by shareholders, will also reduce the company's liabilities by RMB1.63 billion.

Yesterday, GCL said its previous deals to sell projects to Three Gorges Asset Management Co Ltd would now be expanded by the transfer, if approved on June 15, of a further five projects, with a total capacity of 469 MW, to the state-owned hydropower company.

Although the proposed transaction would generate RMB1.39 billion ($217 million) for the seller – and remove RMB4.25 billion ($664 million) from GCL's books – the company announced up to RMB10.4 million ($1.62 million) might be withheld by the purchaser to remedy “certain compliance deficiencies;” RMB855,000 ($134,000) might come off the purchase price to “rectify certain quality matters of the engineering and equipment;” and one of the projects – Yulin Longyuan – would have to pay a settlement agreed with an independent contractor following a dispute over construction fees.

GCL – which is attempting to restructure its debts this month after failing to settle US$500 million worth of senior notes which matured at the end of January, triggering a cross-default – yesterday revealed it must settle RMB16.9 billion of financial commitments this year, including RMB12.4 billion ($1.94 billion) of bank borrowings.