The proposal to acquire a controlling stake in solar manufacturer GCL-Poly’s debt-laden photovoltaic project business has failed, and state-owned China Huaneng is now proposing to select more attractive assets from the sector’s 7 GW investment portfolio.
GCL's plan to withdraw from the project development business may have been in vain.
It seems that Beijing's pocket is not a bottomless pit after all.
After the state-owned entity responsible for the acquisition of the project business suffered a cold reception, the Chinese solar manufacturer and project developer GCL's plan to divest downstream businesses and become a pure producer encountered major obstacles.
The board of directors of the parent company GCL-Poly Energy Holdings Co., Ltd. and its subsidiary GCL New Energy Holdings Co., Ltd. announced on Monday evening that the terms of the proposed transaction have changed and that the state-owned China Huaneng Group Hong Kong Co., Ltd. no longer intends to acquire 51 debt-laden companies. Percentage of project development units.
As GCL’s Elite Time business, which acted as the seller in the transaction, failed to reach an agreement with China Huaneng “after several rounds of friendly negotiations”, the entity of Beijing Holdings will now acquire “certain” GCL New Energy solar projects and/or its A related management company in China.
Although it is undoubtedly meaningful for China Huaneng to select the most attractive assets from GCL, it remains to be seen which assets GCL New Energy will keep. More importantly, the failure of the proposed rescue plan may undermine GCL-Poly's manufacturing strategy because it will leave a formidable debt on the parent company's books.
The first half of the data released by the project development business in August showed the appeal of some coveted Chinese photovoltaic projects. The company reported that compared with the second half of last year, power generation increased by 22% from 7,128. MW combination. With a combined revenue of 3.17 billion yuan (US$451 million) and a net profit of 571 million yuan, China Huaneng will undoubtedly be happy to acquire.
The problem is the debt accumulated during the development of the solar farm. The data for the first half of the year also showed that the asset-liability ratio at the end of June was 11.3 billion yuan, of which 1.96 billion yuan was the parent company GCL-Poly’s inability to act as a guarantor, triggering cross-default.
GCL New Energy’s current total net debt is 39.3 billion yuan, of which 9.9 billion yuan belongs to current bank loans, 3.97 billion yuan belongs to bond and note holders (of which 564 million yuan belongs to current debt) and 126 million yuan of lease obligations. Of this amount, RMB 84 million is working capital. The bank only has 959 million yuan in deposit, the remaining credit line is only 3.45 billion yuan, and the total debt is 42.3 billion yuan.
As a result, some people talked about reissuing notes and bonds worth 6 billion yuan, presumably to make the project business limp until it became a headache for Beijing. Now, the rescue plan has failed and the ball has returned steadily to the GCL-Poly court.
This content is protected by copyright and cannot be reused. If you want to cooperate with us and want to reuse some of our content, please contact: editors@pv-magazine.com.
More articles from Max Hall
Please pay attention to our community standards.
Your email address will not be published. Required places have been marked *
Save my name, email, and website in this browser for the next time you comment.
By submitting this form, you agree that pv magazine will use your data to publish your comments.
Your personal data will only be disclosed or otherwise transmitted to third parties for use in spam filtering or technical maintenance of the website. Unless this is justified in accordance with applicable data protection regulations, or pv magazine is legally obliged to do so, no other transfers will be made to third parties.
You can revoke this consent at any time and it will take effect in the future, in which case your personal data will be deleted immediately. Otherwise, if pv magazine has processed your request or achieved the purpose of data storage, your data will be deleted.
For more information about data privacy, please refer to our data protection policy.
Legal Notice Terms and Conditions Privacy Policy © pv magazine 2021
This website uses cookies to calculate the number of visitors anonymously. Check our privacy policy. X
The cookie settings on this website are set to "Allow Cookies" in order to provide you with the best browsing experience. If you continue to use this website without changing the cookie settings or click "Accept" below, you agree to this.