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Firm taps solar's bright future

HONG Kong-listed power company GCL-Poly Energy yesterday said it has agreed to buy a Chinese mainland solar-cell parts maker for HK$26.3 billion (US$3.4 billion).

GCL-Poly will pay for the purchase of Jiangsu Zhongneng Polysilicon Technology Development Co by issuing new shares to its existing shareholders, it said in a statement to Hong Kong Stock Exchange yesterday. Jiangsu Zhongneng is the nation's biggest supplier of polysilicon, the costliest component in solar panels.

The transaction is valued at about 10.4 times the audited net profit of 2.2 billion yuan (US$322 million) of GCL Solar as of December 31, 2008. This will include a cash payment of US$200 million, issuance of US$350 million secured note and issuance of 10 billion shares at HK$2.20 per share.

GCL-Poly is controlled by Chairman Zhu Gongshan, who owns 34.47 percent of the company.

The transaction is subject to approval by shareholders and the Securities and Futures Commission of Hong Kong.

China is planning to increase its capacity to produce electricity from sunlight by five times by 2020.

"Backed by strong government support the future of the solar industry is promising and the group is well-positioned to capitalize on these opportunities," Zhu said.

GCL-Poly owns or controls 18 thermal power plants, one incineration power plant and one wind power plant on the mainland.


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