GCL-Poly cancels sale of polysilicon shares to Shanghai Electric
Two months after its announcement in early June, the sale of a 51% stake in Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd., China’s largest polysilicon manufacturer, from parent company GCL-Poly Energy Holdings to state-owned Shanghai Electric Group has failed.
The deal would have been worth up to RMB12.75 billion (US$1.86 billion).
In an announcement to the Hong Kong Stock Exchange issued on August 3, GCL-Poly said that “in view of the size and complexity of the transaction, the Parties found it difficult to reach a full agreement on the relevant terms and plans for the Potential Disposal in a short timeframe. Both Parties believe that the timing and conditions for proceeding with the Potential Disposal are not mature enough.”
The “timing and conditions” probably allude to the current slump of demand in the wake of China’s cap on new domestic PV installations announced on June 1. According to the Silicon Branch of the China Non-ferrous Metals Industry Association, twelve Chinese polysilicon producers have currently shut down a combined capacity of 118,000 metric tons.
Update on August 6:
In a briefing session for investors on August 6, Shanghai Electric Group has explained that the impact of China’s new PV policy “is still uncertain, therefore it is difficult for both parties to reach a consensus on the relevant cooperation terms and a plan for the transaction within a short period of time.” However, the company stresses that it “is optimistic about the photovoltaic industry in the long run, and has been paying attention to any opportunity to tap into the photovoltaic industry.”
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