International renewable energy provider GCL New Energy, a subsidiary of GCL-Poly has signed a deal to sell 7 operational solar power plants in China with an aggregate installed capacity of approximately 294MW to one of the five largest state-owned electric utility enterprises in China, China Huaneng Group.
The deal, subject to shareholder agreement is valued at approximately RMB 1.08 billion (US$ 156.53 million). GCL New Energy is selling the PV power plants in a debt-for-equity type swap to reduce its high debt burden.
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Both companies were said to be in discussions to “reach and execute more agreements in relation to disposals of solar power plants in the near future.”
As at 30 September 2019, the aggregate net assets of the six GCL New Energy subsidiaries that owned the 7 operational solar power plants was said to have amounted to approximately RMB 925 million) (US$134 million).
Recently, diversified renewables firm Shunfeng International Clean Energy (SFCE) sold 11 PV power plants in China to China National Nuclear Power Co for RMB 641 million (US$91.2 million). However, SFCE said that the sales transaction on the PV assets would mean a loss of around RMB 705 million (US$100.2 million).
Major changes to China’s PV support mechanisms and massive FIT payment delays by utilities to PV plant owners and operators have financially squeezed many PV project developers since May 2018, resulting in heavily discounted sales deals on PV assets.