GCL-Poly generates another $349m towards paying down debt
Sep 9, 2019 08:11 PM ET
- The polysilicon maker has turned a quick $160 million profit from the sale of its stake in a fund it paid $189 million to establish just five months ago. The heavily indebted manufacturer needs to raise funds to pay for its production capacity expenditure.
GCL-Poly shareholders have unsurprisingly voted through the sale of a stake in an investment which will realize the solar manufacturer a RMB1.14 billion (US$160 million) profit after just five months.
GCL polysilicon manufacturing subsidiary Jiangsu Zhongneng Polysilicon Technology Development Co Ltd in April announced it was contributing RMB1.35 billion towards a RMB3.35 billion fund to develop advanced manufacturing in the Chinese city of Xuzhou.
The resulting Xuzhou Zhongping GCL Industrial Upgrading Equity Investment Fund LLP was set up to advance industrial manufacturing in Xuzhou and included within its remit the ability to contribute funds to Xinjiang GCL New Energy Material Technology, a separate subsidiary of GCL-Poly Energy Holdings Ltd.
Just five months on, GCL-Poly shareholders have approved a plan to sell the 31.5% stake the company owns in the investment fund to the fund itself for RMB2.49 billion.
Parent company GCL-Poly has been piling up huge debts to finance rapid expansion of its polysilicon production capacity – and running its poly manufacturing operation at a loss for six months – ahead of an anticipated rush of PV orders from China that is expected to start this month.
GCL’s solar project development business GCL New Energy is being prepped for sale to the state-owned China Hua Neng Group Hong Kong Ltd as the parent company attempts to settle borrowings of RMB29.9 billion that are due by August 2020, according to the company’s latest set of first-half figures.