8.8 Million Yuan! GCL New Energy to Sell Its Subsidiary

PVTIME – On January 25, GCL New Energy Holdings Limited announced that Ningxia GCL New Energy,an indirect subsidiary of GCL-Poly and GNE (as the seller) and Hunan Xinhua (as the purchaser) entered into the Third Phase Share Purchase Agreement. Pursuant to the Agreement, Ningxia GCL New Energy agreed to sell 100% equity interest in Ningxia Xinken Jianquan Photovoltaic Power Co., Ltd in the disposal targets at a consideration of approximately RMB 8.8 million.

The target company (Ningxia Xinken Jianquan) owns one operational solar power plant in China with an aggregate grid-connected capacity of approximately 30MW. The unaudited net asset value of Ningxia Xinken Jianquan as at the reference date (ie, August 31, 2021) and the audited net asset value on December 31, 2020 were approximately RMB 6,346,100 and RMB 10,774,600 respectively.

After the closing date, Ningxia Xinken Jianquan will no longer to be a subsidiary of GCL, and the profit and loss, as well as the assets and liabilities of Ningxia Xinken Jianquan will no longer be consolidated in to the consolidated financial statements of the Group. The net cash proceeds form the transactions are expected to be approximately RMB 233 million, which GCL intends to use for repayments of its debts. As calculated with reference to the GCL’s unaudited financial statements as of June 30, 2021, GCL’s gearing ratio will be reduced by approximately 0.1% with the repayments, thus effectively reducing its financial risks.