GCL-Poly to cut GNE stake, troubled subsidiary gets nod for debt restructuring

Chinese solar-grade polysilicon maker GCL-Poly Energy Holdings Ltd (HKG:3800) will have its majority stake in troubled solar plants operator GCL New Energy Holdings Ltd (HKG:0451), or GNE, reduced following an upcoming share placement.

Elite Time Global Ltd, a wholly owned subsidiary of GCL-Poly, has entered into an agreement with placing agents UBS AG (Hong Kong Branch) and CCB International Capital Ltd for the placement of up to 2 billion GCL New Energy shares. The total number of GNE placing shares represents some 10.49% of the current issued share capital of the company and about 9.49% as enlarged by the subscription, the announcement says.

The placing price amounts to HKD 0.455 (USD 0.059/EUR 0.048) per share, which is a discount of around 14.15% to GNE’s closing price on February 9, but a premium of some 12.21% to the average closing price for the last 10 trading days. At that price, the maximum amount of proceeds from the placing is estimated at HKD 910 million gross and HKD 895 million net. This is based on the assumption that Elite Time Global will subscribe all shares placed out to the placees.

Following the planned transaction, the vendor will hold a stake of about 53.34% in GNE compared to 58.94% prior to the placing.

The placing announcement was made the day after holders of 91.85% of recently defaulted senior notes approved a debt restructuring plan that sets January 30, 2024 as the new maturity date. As previously reported, GNE defaulted on USD 500 million (EUR 412m) worth of 7.1% senior notes on January 30, 2021. Under the terms of the approved plan, they will be replaced by new notes bearing interest at 10.00% per annum on the outstanding principal amount.

GCL-Poly said in a bourse filing it intends to use the net proceeds from the placing, through GNE, to pay back existing borrowings and for general corporate purposes.

(USD 1.0 = EUR 0.824)

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