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GCL to generate $304m with 430 MW Chinese project sale

The heavily indebted solar project business of Chinese polysilicon producer GCL-Poly is set to realize a RMB2 billion ($304 million) windfall through the long-mooted sale of 18 solar farms with a total generation capacity of around 430 MW.

Shareholders in GCL New Energy and its GCL-Poly parent will be asked to vote on a proposal to sell the projects to two investment funds owned by state-owned electric utility China Huaneng and public peer the Industrial and Commercial Bank of China.

GCL New Energy today said net receipts of RMB2 billion would amount to a RMB183 million net loss on the project sales, based on their book value, but added it and its parent had invested a total RMB1.83 billion into the facilities.

The sale price has been pegged at RMB667 million for solar projects owed RMB1.13 billion in state subsidies. The project companies being sold owe a net RMB970 million in payments to GCL New Energy and must also settle RMB310 million in dividends upon receipt of the overdue subsidies as well as an additional RMB68 million dividend, adding up to the estimated net cash generation of RMB2 billion.

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GCL New Energy said the proposed project sale would remove RMB2.04 billion of liabilities from its books, some RMB621 million of which is due for settlement within a year.

Details of the shareholder votes necessary to approve the deal have been promised by February 28.

The RMB2 billion windfall will be put towards the RMB7.16 billion GCL New Energy owes in bank loans by June 30. The company said at the end of June this year, it had a further RMB8.37 billion due to creditors by that date.

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Source: pv magazine