GCL-Poly confirms sale of solar wafer production assets for US$1.3 billion

GCL-Poly Energy Holdings, the largest polysilicon and wafer producer in the PV industry has confirmed the sale of its wafer production assets for approximately US$1.3 billion in cash.

GCL-Poly Energy Holdings had said in early November that it would sell its wafer operations to pay down its high debt situation, created when it went on a massive spending spree to build out the largest capacity of polysilicon production (65,000MT) and wafer production (13GW) in the solar PV industry. 

The deal with Jiangsu Golden Concord Energy (JGCE) and several other investors was signed on November 29. 

In what was described as a first tranche acquisition and payment, JGCE was said to be acquiring one wafer production facility and one ingot production facility in Wuxi, Jiangsu for US$341.4 million in cash.

A second tranche of acquisitions, which include a total of six wafer production facilities and one ingot production facility, would be sold to Shanghai Miaochang Investment Management Center and Shanghai Zhongmin Yinfu Investment Management Co for US$958.3 billion. 

The wafer facilities are located in Jiangsu Province in the cities of Suzhou, Xuzhou, Changzhou, Yangzhou and Taicang. The ingot production facility is based in Xuzhou, Jiangsu Province. 

Net proceeds of the deal to GCL-Poly were said to be in the range of HK$9,863 million (US$1.27 billion), helping to drive the company’s net debt to equity ratio down from 146.5% on 30 June 2014 to a pro forma net debt to equity ratio of 38.8% after the completion of the deal. 

Zhu Gongshan, GCL-Poly’s CEO is one of the purchasers through JGCE, which is the trust of founder’s and family, including Gongshan. 

GCL-Poly had come under criticism from shareholders over the planned sale as there were fears of nepotism and an undervaluation of the ingot/wafer operations, which also led to a sell-off in shares.