New | GCL-Poly sale of solar wafer business to cut finance costs, raise funds
An expected HK$2.46 billion one-off gain from the all-cash wafer business’ sale will allow the firm to consider paying a dividend – the first since 2011
A controversial sale by debt-laden GCL-Poly Energy of its solar wafer business unveiled last week will markedly cut its finance costs and allow it to raise fresh funds to ramp up new lower-cost capacity of its more lucrative polysilicon production lines, according to its management.
An expected HK$2.46 billion one-off gain from the all-cash wafer business’ sale will also allow the firm to consider paying a dividend – the first since a 5.5 HK cents payout in 2011 - after the deal is completed, said chief financial officer Charles Yeung Man-chung.
"We should be in a position to pay a special dividend after the sale, but it depends on the finalisation of our capital expenditure plan," Yeung told reporters yesterday. "If there is extra money left, management will certainly consider paying a special dividend."
Jiangsu province-based GCL, the world’s largest maker of solar panel raw material polysilicon and key component solar wafer, said on Sunday it has agreed to sell a wafer plant and a plant that makes ingots used in wafers production to its chairman and largest shareholder Zhu Gongshan, for 2.1 billion yuan.
It has also agreed to sell six other wafer plants for 5.9 billion yuan to a company backed by an investment arm of China Minsheng Bank and state-owned bad debt clearer China Great Wall Asset Management.
GCL said it is possible for the buyers to re-sell the plants after restructuring their debt at a later date to Zhu, who has already said he will inject the 2.1 billion yuan wafer plants it is buying from GCL into Shenzhen-listed insolvent solar panel and parts maker and solar system installer Shanghai Chaori Solar Energy Science & Technology. Zhu is part of a consortium taking over Chaori.
Addressing investors’ concern that Zhu may be profiting from the connected transactions at the expense of minority shareholders, Zhu has agreed to pay GCL a portion of any market value gain the wafer plants may see within two years if they are re-sold.