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GCL-Poly Energy Holdings Limited, a China based energy producer has acquired polysilicon and solar wafer producer GCL Solar Energy Technology Holdings Inc, also based in China for a reported US$3.38 billion. Both companies have similar corporate identities in part due to Zhu Gong Shan, Chairman of GCL-Poly, being a majority shareholder in both companies. GCL-Poly had previously planned to make further investments in the renewable energy sector as part of its overall plans for 2009.
“GCL-Poly is a leading renewable energy supplier dedicated to providing green and clean power,” commented Zhu Gong Shan. “The Group has extensive experience in constructing, operating and managing power plants. GCL Solar’s polysilicon production scale and cost advantages provides the Group with a strong driving force and a solid foundation in developing large-scale solar power plants in the future.
Backed by strong government support, the future of the solar industry is promising and the Group is well-positioned to capitalize on these opportunities. I am very optimistic and have every confidence in the prospect of GCL-Poly.”
GCL Solar has claimed that its polysilicon production capacity is expected to reach 18,000MT by the end of 2009. Production plans also call for expansion to 21,000MT by the end of 2010.
“The PRC government has also been a strong advocate of solar power, and in line with this, local governments have launched various incentive programs to encourage the use of solar power. The Ministry of Finance recently introduced a program to subsidize and promote the application of roof-top solar systems. We expect the PRC government to initiate more incentives or subsidy programs to encourage the adoption of solar power going forward,” Zhu said.
GCL-Poly will make a cash payment of US$200 million as part of the acquisition as well as issue a US$350 million secured note. The majority of the investment will be funded by the issuance of 10,039,772,727 shares at HK2.2 per share (a 12% discount to share price).
