GCL-Poly Energy, a Hong Kong-listed power plant operator, has agreed to acquire its chairman's polysilicon business in China in a HK$26.4bn ($3.41bn) deal.The company said it would buy Jiangsu Zhongneng, a manufacturer of upstream raw materials for solar cell production, from Zhu Gongshan, its chairman and controlling shareholder.
The deal is a big bet on the solar industry in China, a market on which solar cell makers from all over the world have set high hopes but which is suffering from overcapacity and dramatic price drops, especially in the upstream segment Jiangsu Zhongneng is focused on.
To fund the purchase, GCL-Poly will issue 10bn new shares at HK$2.2 each, representing a 12 per cent discount to the company's last closing price. It will also issue $350m in secured notes and pay Mr Zhu $200m in cash.