NewGCL-Poly Energy shares sink almost 16pc on potential sale of wafer business

Shares of GCL-Poly Energy, the world’s largest maker of solar power panel materials polysilicon and wafers, plunged after it announced it is planning to sell all of its wafer production business potentially to its largest shareholder.

The Jiangsu province-based company closed the morning trading session 15.9 per cent down at HK$2.12, the lowest since May 9 this year.

GCL Friday night said in a filing to Hong Kong’s stock exchange that agreement for the potential sale to “an independent third party who may or may not sell the wafer [business to chairman Zhu Gongshan] or his associates” is intended to be signed before the end of this year, subject to shareholders’ approval.

“Since the wafer business is not that lucrative, the sale should not reduce the company’s profit a lot, and the sales proceeds would help cut its high debt load,” said an Asian brokerage analyst covering the stock. “But given the sale’s intention and company’s future direction is unclear, investors are selling on the news.”

GCL last Friday also said Zhu its largest shareholder and eight other investors have agreed to buy a 30 per cent stake in debt-troubled Shenzhen-listed Shanghai Chaori Solar Energy Science & Technology for 1.46 billion yuan (around HK$1.85 billion).

Chaori, a solar panel and parts maker, in March this year became the first company to default in the mainland’s onshore bond market.