Heavily-indebted Chinese polysilicon maker GCL-Poly is poised to hand over RMB1.22 billion (US$189 million) for a less-than-6% stake in a subsidiary it owns the rest of.
Despite the travails the company has endured this year – with trading in GCL stock still suspended on the Hong Kong Stock Exchange pending publication of its overdue 2020 figures – GCL said yesterday it would hand over an initial RMB219 million (US$33.8 million) this month and two further payments of RMB500 million each by the end of September and December, to acquire the 5.835% of the Suzhou GCL subsidiary it does not already hold.
The Suzhou unit owns most of GCL’s remaining 2.7 GW of solar generation capacity in China and, with the poly maker selling off projects left, right and center to reduce debt at its GCL New Energy solar project operation, the parent company yesterday said the Suzhou GCL stock purchase would ensure “Suzhou GCL New Energy can maximize its autonomy to manage its operations, streamline the decision making process of Suzhou GCL New Energy (including, among others, disposals of operational solar power plants in order to achieve an asset light model) and enhance the profit return of the operational solar power plants indirectly owned by Suzhou GCL New Energy.”
The holder of the minority stake in Suzhou GCL is private equity investment fund Sumin Ruineng which, according to yesterday’s update is “sponsored and managed by Sumin Investment,” an entity in which the chairs of GCL-Poly and GCL New Energy Holdings both have an interest.
At the top level of a complex ownership chain, Sumin Investment is 10% owned by GCL Capital Management. Below that, at level two, GCL Capital is 60% owned by GCL Group and 40% owned by Taicang Port GCL Power Generation. At level three, GCL Group is held 48.86% by GCL (Liaoning) Industrial, which itself, at level four of the chain, is wholly owned by GCL-Poly chairman and director Zhu Gongshan, the father of GCL New Energy Holdings chairman and director Zhu Yufeng.
Going back up to level two, Taicang Port is 72% owned by the Zhu family trust, of which Credit Suisse Trust Ltd is a trustee and Zhu Yufeng and his family – including his father – are beneficiaries. The same family trust also owns the Asia Pacific Energy Fund Ltd which owns the Concord Group which holds the 51.14% balance of shares in the level-three entity GCL Group not held by GCL (Liaoning) Industrial.