Solar Cell Maker GCL-Poly Energy Sells Production Facilities For $1.3 Billion

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

GCL-Poly Energy Holdings Limited has debt of about $6 billion on its balance sheet which it plans to reduce by selling at least some of its production facilities of polysilicon wafers.

GCL-Poly Energy

One of China’s and the world’s largest solar power equipment manufacturers, GCL-Poly Energy [PDF], has announced its plans to sell seven of its polysilicon wafer and two ingot production facilities located across China to raise funds that will be used to repay debt.

The production facilities will be sold to Jiangsu Golden Concord Energy Co., Ltd. and Shanghai Miaochang Investment Management Center for a total of $1.3 billion in an all-cash transaction, the company reported last week.

The net cash proceeds from the transactions will be about $1.27 billion (after accounting for taxes and transaction cost). These proceeds will be used for repayment of certain indebtedness; future capital expenditures; potential strategic investments; and general corporate purposes. The company hopes that the debt repayment would reduce the current debt to an equity ratio of 146.5% to 38.8%.

The two companies that will acquire the production facilities from GCL-Poly Energy are expected to sign agreements with the company to supply polysilicon raw materials, which would boost sales and income for the company. GCL-Poly has not given up on the solar cell production business and plans to increase production capacity of polysilicon by 25,000 tonnes by the end of next year. The sale of these assets, thus, seems like a minor course correction by the company in order to maintain a healthy financial condition.

During the first half of 2014, the company reported a total revenue of $2.22 billion, an increase of about 52% over the same period last year. The company also reported a profit of $116 million during the period against a loss of $118 million during the same period last year.

The company seems to be positioning itself to the changing global solar power market. China is looking to consistently increase solar power installation while several other countries, like India and Japan, are also catching up fast. The company may have felt a compulsion to take strategic decisions to help it address challenges like increasing competition and regulatory issues like anti-dumping duties.

Image Credit: GCL-Poly Energy Holdings


Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.

Latest CleanTechnica.TV Videos

Advertisement
 
CleanTechnica uses affiliate links. See our policy here.

Mridul Chadha

Mridul currently works as Head-News & Data at Climate Connect Limited, a market research and analytics firm in the renewable energy and carbon markets domain. He earned his Master’s in Technology degree from The Energy & Resources Institute in Renewable Energy Engineering and Management. He also has a bachelor’s degree in Environmental Engineering. Mridul has a keen interest in renewable energy sector in India and emerging carbon markets like China and Australia.

Mridul Chadha has 425 posts and counting. See all posts by Mridul Chadha