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GCL-Poly Energy to buy Chinese solar firm

Published: 23 Jun 2009 23:28:00 PST

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Jun. 24, 2009 (China Knowledge) - GCL-Poly Energy Holdings Ltd<3800>, a foreign-owned company, on Jun. 23, announced that it plans to spend HK$26.35 billion to purchase a 100% stake in a Chinese polysilicon producer, Jiangsu Zhongneng Polysilicon Technology Development Co, sources reported.

The Hong Kong-listed enterprise, which is engaged in the development of cogeneration and power plants as well as coal trading in China, will pay HK$19.91 billion to Chairman Zhu Gongshan and relevant parties through the issuance of 9.05 billion new shares at an average price of HK$2.2, which is a 12% discount compared with the last-traded share price of HK$2.5. The new shares will be equivalent to 885% of the current total equity and will account for 81.82% of the enlarged equity.

The cogeneration plant operator will pay Zhu the remaining HK$6.44 billion (US$830 million), of which the firm will pay US$200 million in cash. The firm will also issue US$350 million in secured notes and 989 million new shares for a total of US$280 million or HK$2.2 apiece.

After the two transactions, Zhu and connected parities will hold a combined 56.17% stake in GCL-Poly Energy, up from the current 34.47%.

In the first quarter of this year, Jiangsu Zhongneng produced 1,094 tons of polysilicon, the primary raw material used in the solar industry, sources reported.

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