The polysilicon maker lurched from a $17m profit in 2019 to a $960 million loss last year, according to an unaudited extract from its overdue annual figures. Publication is being held up by an auditor enquiry relating to a $71m abandoned-production-project pre-payment which appears to be either owed by, or to, a GCL subsidiary.
With shares in Chinese polysilicon maker GCL-Poly still suspended pending the overdue publication of the company’s annual report for 2020, the board has revealed the heavily indebted business slid to an, unaudited, loss of RMB6.25 billion (US$962 million).
The company published an extract from the overdue figures as part of an update to the Hong Kong Stock Exchange yesterday which attempted to explain the financial issue which is holding up the accounts.
According to the extract from the unaudited figures, revenue slumped last year to RMB14.6 billion, from the RMB19.2 billion posted in 2019. The published numbers included an, as yet unexplained ‘other gains and losses’ column which ballooned from a RMB1.06 billion (US$163 million) plus in 2019 to a RMB4.99 billion reverse last year. Elsewhere, the money owed by GCL to other companies for non-trade-related matters rose from RMB555 million to RMB1.87 billion (US$288 million) and the figures for notes payable within a year also escalated, from RMB422 million (US$64.9 million), in 2019, to RMB3.31 billion.
That added up to the anticipated big annual loss, which followed a RMB110 million (US$16.9 million) profit in 2019.
Shareholders will have to wait for publication of the finalized accounts to learn more details because auditor Deloitte Touche Tohmatsu wants more details about “a commercial bill payable no later than October,” received by GCL subsidiary Jiangsu Zhongneng Polysilicon Technology Development Co Ltd. It is a curious way to describe the payment as it appears the RMB460 million figure involved may actually be payable as a refund to the GCL unit after Jiangsu Zhongneng made a pre-payment of RMB510 million in September 2019 to a contractor, for a “silicon material production project,” which never materialized.
With Covid-19 reportedly delaying plans for the production facility in Xuzhou Economic Development Zone, in Jiangsu province, GCL yesterday said its subsidiary had started talks to terminate the contract in October and entered a termination agreement earlier this month, subsequently receiving the “commercial bill payable no later than October.”
GCL has, as yet, made no announcement of the progress of a planned debt restructure which involves issuing new senior notes to replace US$500 million of investments which went unpaid at the end of January, triggering a RMB4.54 billion cross-default. GCL had previously said it hoped to submit the plan to the Court of Bermuda, where it is registered for tax reasons, by the middle of this month.
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Source: pv magazine