GCL New Energy to buy remaining minority of Chinese solar plant owner

Chinese solar plants operator GCL New Energy Holdings Ltd (HKG:0451) will acquire the 5.835% it does not already own in a solar power investment firm that indirectly holds the bulk of its 2.7 GW of solar generation capacity in China.

The Chinese company said in a bourse filing on Tuesday it will pay a total of CNY 1.22 billion (USD 188.2m/EUR 159.3m) in three instalments to take full ownership of Suzhou GCL New Energy and make it a wholly-owned subsidiary. The interest will be purchased from private equity investment fund Sumin Ruineng, which is sponsored and managed by Sumin Investment.

Payments under the deal will be finalised by the end of December.

GCL New Energy explained that taking full control over this unit will free it from the requirement to obtain the consent of Sumin Ruineng with regard to key corporate actions. "Therefore, Suzhou GCL New Energy can maximise its autonomy to manage its operations, streamline the decision making process of Suzhou GCL New Energy (including, among others, disposals of operational solar power plants in order to achieve an asset light model) and enhance the profit return of the operational solar power plants indirectly owned by Suzhou GCL New Energy," the filing says.

GCL New Energy, which is owned by GCL-Poly Energy Holdings Ltd (HKG:3800), defaulted on USD 500 million (EUR 423m) worth of 7.1% senior notes in January and since then has been working on a debt restructuring plan. The company has been disposing of numerous solar assets over the past weeks.

The latest announcement notes that the chairmen of GCL-Poly and GCL New Energy have an interest in Sumin Investment.

(CNY 1.0 = USD 0.154/EUR 0.131)

(USD 1.0 = EUR 0.845)

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