CIC takes 20 per cent stake in GCL-Poly Energy for $710 million
19 Nov 2009
China Investment Corporation (CIC), the country's $300 billion sovereign wealth fund, has acquired a 20 per cent stake in a Hong Kong-based new energy company GCL-Poly Energy Holdings Ltd (GCL-Poly) for $710 million.
CIC today signed a binding framework agreement with GCL-Poly for the subscription of approximately 3,108 million shares of GCL-Poly at a price of HK$1.79 per share. The total investment is around HK$5.5 billion ($710 million), said CIC in a statement today.
The subscription is conditional upon, among other things, the signing of definitive documentation and approval by GCL-Poly's shareholders. Upon completion of the subscription, CIC will own approximately 20 per cent stake in GCL-Poly.
As part of the sovereign wealth fund plan to invest in new energy companies, CIC will establish a joint venture with GCL-Poly to develop photovoltaic projects or other solar energy projects, with an initial combined share capital of $500 million.
CIC will hold 49 per cent of the joint-venture along with two board seats and GCL-Poly, 51 per cent.
GCL-Poly said it intends to use the net proceeds raised from the subscription for general working capital, repayment of borrowings and exploration of new business opportunities, including investment in and development of the new JV Company.
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