Shareholders at polysilicon manufacturer GCL-Poly are set to vote in the new year on proposals to generate RMB3.64 billion ($554 million) to pay down debts at the company’s solar project development business by selling off more than 720 MW of PV project capacity.
Having announced two big project sell-offs to state-owned entities last week, GCL on Sunday announced a second phase to one of the proposed sales, to make that transaction even larger.
A week ago, the GCL New Energy business announced it had formulated a deal to divest 174 MW of Chinese solar generation capacity by selling six projects to state-owned Xuzhou State Investment and Environmental Protection Energy Co Ltd for a net RMB460 million ($70.1 million). On Sunday, GCL said “phase two” of the deal would see a further 217 MW of project capacity sold to the same buyer for a net RMB985 million, provided shareholders give the go-ahead.
The projected RMB1.45 billion windfall would be supplemented by the removal of RMB1.87 billion of liabilities from GCL’s books – RMB919 million from the first tranche of the sale and RMB951 million from the balance.
GCL said the RMB9.53 million net loss booked on the project value of the first set of sales would be raised by RMB27.4 million in the second half of the deal.
In between the two parts of that deal, GCL on Thursday mooted a long-proposed sale of 18 projects with a total generation capacity of around 430 MW to two investment funds, owned by state-owned electric utility China Huaneng and public peer the Industrial and Commercial Bank of China. That deal would herald a RMB2 billion cash injection for GCL on a sale book-loss of RMB183 million and would remove a further RMB2.04 billion of GCL liabilities.
With details of when the shareholder vote will take place promised by February 28, investors will be asked to approve three transactions which would generate RMB3.64 billion in cash and take RMB3.9 billion of liabilities off the books while accepting a book loss of RMB220 million and yielding up 741 MW of project capacity.
The cash windfall would pay off more than half the RMB7.16 billion GCL said on Thursday it owes in bank borrowings and other loans by June 30, 2021. At the end of June this year, GCL said it owed a further RMB8.37 billion to other creditors by the same date. The company did not announce an update on how much the removal of liabilities connected with the three proposed transactions would affect its short-term liabilities.
Those three proposed deals came on top of Friday's news GCL will sell its 51% stake in a 100 MW Chinese project, to another state-owned entity for another RMB198 million.
GCL will bank RMB179 million from the sale of its 51% stake in the Ningxia Qingyang project company and is set to receive payables of RMB9.36 million owed to it by the business as part of the sale agreement, plus dividends of RMB9.68 million. The project company will be sold off in a RMB350 million deal. State-owned hydropower company Hunan Xinhua Water Conservancy and Electric Power Co Ltd will acquire 80% of the business and project developer Jia Wei Shanghai will assume the balance. PV engineering business Zhengfa New Energy will sell the 49% of Ningxia Qingyang which GCL does not own.