GCL TECHNOLOGY HOLDINGS LIMITED Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
GCL-POLY ENERGY HOLDINGS LIMITED ڭл㒥ঐ๕છٰϞࠢʮ̡
(Incorporated in the Cayman Islands with limited liability)
(Stock code: 3800)
(1) DISCLOSEABLE TRANSACTION IN RELATION TO THE DISPOSAL OF
EQUITY INTEREST IN INNER MONGOLIA ZHONGHUAN-GCL AND
GRANT OF PUT OPTION
(2) TRANSACTIONS RELATING TO LESHAN SUMIN
1. INTRODUCTION
On 26 February 2021 (after trading hours), the Company through its wholly-owned subsidiary, Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.* (江蘇中能硅業科技發展有限公 司) (''Jiangsu Zhongneng'') and Leshan Sumin New Energy Technology Co., Ltd.* (樂山蘇民 新能源科技有限公司) (''Leshan Sumin'') entered into a series of transactions (as detailed in below) with Leshan Zhongping Polysilicon Photovoltaic Information Industry Investment Fund Partnership (Limited Partnership)* (樂山市仲平多晶硅 光電資訊產業基金合夥企業（ 有限合夥 ）) (the ''Leshan Fund'') and Leshan Guangyang Technology Development Partnership (Limited Partnership)* (樂山 光揚科技開發合夥企業（ 有限合夥）) (''Leshan Guangyang''). Leshan Sumin, as the project company for the granular silicon project with a production capacity of 60,000 tonnes in Phase I in Leshan, will successfully introduce strategic investors, thereby increasing the amount of investment in granular silicon in Leshan. After completion of such transactions, Leshan Sumin will remain as a subsidiary of the Company and its financial statements will continue to be consolidated.
2. DISPOSAL OF EQUITY INTEREST IN INNER MONGOLIA ZHONGHUAN-GCL AND GRANT OF PUT OPTION
On 26 February 2021 (after trading hours), the Company's indirect wholly-owned subsidiary, Jiangsu Zhongneng (as the seller) and the Leshan Fund (as the purchaser) entered into the Share Purchase Agreements, under which:
(i) Jiangsu Zhongneng agreed to sell 3.848% equity interest in Inner Mongolia
Zhonghuan-GCL for a consideration of RMB600,000,000 (the ''Consideration'', and such transaction the ''Disposal''); and
(ii) Jiangsu Zhongneng agreed to grant the Put Option for the Target Equity to the Leshan Fund under which the Leshan Fund has the right to require Jiangsu Zhongneng to repurchase the 3.848% equity interest upon the occurrence of certain specific events.
3. TRANSACTIONS RELATING TO LESHAN SUMIN
Transfer of Equity Interest in and Capital Increase in Leshan Sumin
As disclosed in the Company's clarification announcement dated 16 October 2020, Leshan Sumin is a wholly-owned subsidiary of Leshan Guangyang Technology Development Partnership (Limited Partnership)* (樂山光揚科技開發合夥企業（有 限合夥)) (''Leshan Guangyang''). Wu Guojing and Fu Xuguang, the only equity holders of Leshan Guangyang at the time of the clarification announcement, are both full-time employees of Jiangsu Zhongneng and hold their entire equity interest in Leshan Guangyang on behalf of Jiangsu Zhongneng.
On 29 December 2020, Leshan Guangyang transferred their entire equity interest in Leshan Sumin to Jiangsu Zhongneng for a nominal consideration of RMB1.0. As at the date of this announcement, Leshan Sumin is an indirect wholly-owned subsidiary of the Company.
On 26 February 2021 (after trading hours), the Company (through Jiangsu Zhongneng) entered into the following agreements:
(1) the equity transfer agreement between Jiangsu Zhongneng and the Leshan
Fund, pursuant to which Jiangsu Zhongneng agreed to sell, and the Leshan Fund agreed to purchase, 86.67% of the equity interest in Leshan Sumin for a nominal consideration of RMB1.00 (the ''Leshan Sumin Equity Transfer
Agreement'');
(2) the capital increase agreement between Jiangsu Zhongneng, the Leshan Fund,
Leshan Guangyang and Leshan Sumin, pursuant to which the Leshan Fund and Jiangsu Zhongneng agreed to increase their subscribed contribution to the registered capital of Leshan Sumin from RMB1.3 billion to RMB1.9 billion and from RMB200 million to RMB1 billion respectively, and Leshan Guangyang agreed to commit to a contribution to the registered capital of Leshan Sumin of RMB245 million (the ''Leshan Sumin Capital Increase
Agreement'');
(3) the shareholders' agreement between Jiangsu Zhongneng, the Leshan Fund and Leshan Sumin (the ''Leshan Sumin Shareholders' Agreement''); and
(4) the acting in concert agreement between Jiangsu Zhongneng and the Leshan Fund (the ''Acting in Concert Agreement'').
4. INFORMATION ON THE LESHAN FUND
We refer to the announcement of the Company dated 31 May 2019 in relation to the establishment of the Leshan Fund. As disclosed in the announcement, the Leshan Fund is a limited partnership established under the laws of the PRC, and its general partner is Tibet Zhongping Enterprise Management Co., Ltd.* (西藏仲 平企業管理有限公司), a limited company incorporated in the PRC (the ''General Partner''). As at the date of this announcement, Jiangsu Zhongneng is a limited partner of the Leshan Fund and will invest RMB1,500,000,000 in the Leshan Fund. Save as disclosed above, to the best of the Directors' knowledge, information and belief after making all reasonable enquiries, the Leshan Fund, the General Partner and their ultimate beneficial owners are third parties independent of the Company and its connected persons.
Set out below are details of the partners of the Leshan Fund.
NumberName
PartnershipLicense Number
Address
1
Leshan Gaoxin Investment
Development (Group) Limited* (樂山高新投資發展（ 集團）有限公 司) (''Leshan Gaoxin'')
Limited partner
91511100731590868M
No. 489 Angang Road,
Leshan Gaoxin District, Sichuan Province
2
Leshan Zhongping Nengxin
Corporate Management and Consulting Partnership (Limited Partnership)* (樂山市中平能鑫企 業管理諮詢合夥企業（ 有限合夥）)
(''Zhongping Nengxin'')
3
Chengdu Chuanshang Yishiyi Hao
Enterprise Management and Consultation Center (Limited Partnership)* (成都川商壹拾壹號 企業管理諮詢中心（ 有限合夥）)
(''Chuanshang Fund'')
Limited partner
91511100MA67WWWN8NLimited partner
91510104MA6B793R0Y
No. 7, 12/F, No. 489
Angang Road, Leshan Gaoxin District, Sichuan Province
No. 407, Block 1, Jialin
Kechuang Building, No. 138 Jinsheng Road, Jinjiang Industrial Area, Chengdu City, Sichuan Province
4
Jiangsu Zhongneng Polysilicon
Technology Development Co., Ltd.* (江蘇中能硅業科技發展有限 公司) (''Jiangsu Zhongneng'')
Limited partner
913203017849976109
No. 66 Yangshan Road,
Xuzhou Economic and Technology Development District, Jiangsu Province
5
Tibet Zhongping Enterprise
Management Co., Ltd.* (西藏仲平 企業管理有限公司) (the ''General Partner'')
General partner
91540195MA6T37BC87
Room 308-32, Liuwu
Building, Liuwu New Area, Lhasa City, Tibet Autonomous Region
Shanghai Zhongping Guoyu Assets Management Limited* (ɪऎʕ̻⒠༟ପ ၍ଣϞࠢʮ̡) (GP) | Jiangsu Zhongneng (LP) (a wholly-owned subsidiary of the Company) | Shanghai Zhongping Guojing M&A Equity Investment Fund Partnership (Limited Partnership)* (ɪऎʕ̻ዽԻᒅٰᛆ ҳ༟ਿږΥྫΆุ €ϞࠢΥྫ㕙) (LP) | Huang Zhenghong (ර͍ߎ) (LP) |
RMB2 million
Tibet Zhongping (GP) | Leshan Gaoxin (LP) | Chuanshang Fund (LP) | Zhongping Nengxin (LP) | Jiangsu Zhongneng (LP) (a wholly-owned subsidiary of the Company) |
Subscribed: RMB500 million Initially paid-up: RMB500 million
Leshan Zhongping Polysilicon Photovoltaic Information Industry Investment Fund*
(ᆀʆ̹̻ε౺ᾼΈཥڦࢹପุਿږ)
(Total size: RMB4.502 billion, initially paid-up: RMB3.452 billion)
5. LISTING RULES IMPLICATIONS
As the highest applicable percentage ratio in respect of the Disposal exceeds 5% but is lower than 25%, the entering into of the Disposal constitutes a discloseable transaction of the Company and is therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.
The Put Option is exercisable at the discretion of the Leshan Fund upon the occurrence of certain specified events, with the exercise price of the Put Option to be determined in accordance with the terms of the Share Purchase Agreements. As the highest applicable percentage ratio in respect of the Jiangsu Zhongneng Put Option exceeds 5% but is less than 25%, the grant of the Put Option constitutes a discloseable transaction of the Company and is therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.
As the highest applicable percentage ratios in respect of the transactions contemplated under the Leshan Sumin Equity Transfer Agreement and the Leshan Sumin Capital Increase Agreement (in aggregate) does not exceed 5%, they do not constitute notifiable transactions of the Company under Chapter 14 of the Listing Rules.
1. INTRODUCTION
The Board is pleased to announce that on 26 February 2021 (after trading hours) the Company through its wholly-owned subsidiary, Jiangsu Zhongneng, entered into the following transactions:
(a) Jiangsu Zhongneng (as the seller) and the Leshan Fund (as the purchaser) entered into the Share Purchase Agreements. Pursuant to the Share Purchase Agreements, (i) Jiangsu Zhongneng agreed to sell 3.848% equity interest (''Target Equity'') in Inner Mongolia Zhonghuan-GCL to the Leshan Fund for a consideration of RMB600,000,000; and (ii) Jiangsu Zhongneng agreed to grant the Put Option for the Target Equity to the Leshan Fund.
(b) Jiangsu Zhongneng entered into the following agreements relating to equity interest in Leshan Sumin:
(i) the Leshan Sumin Equity Transfer Agreement between Jiangsu Zhongneng and the Leshan Fund, pursuant to which Jiangsu Zhongneng agreed to sell, and the Leshan Fund agreed to purchase, 86.67% of the equity interest in Leshan Sumin for a nominal consideration of RMB1.00;
(ii) the Leshan Sumin Capital Increase Agreement between Jiangsu Zhongneng, the Leshan Fund, Leshan Guangyang and Leshan Sumin, pursuant to which the Leshan Fund and Jiangsu Zhongneng agreed to increase its subscribed contribution to the registered capital of Leshan Sumin from RMB1.3 billion to RMB1.9 billion and from RMB200 million to RMB1 billion respectively, and Leshan Guangyang agreed to commit to a contribution to the registered capital of Leshan Sumin of RMB245 million;
(iii) the Leshan Sumin Shareholders' Agreement between Jiangsu Zhongneng, the Leshan Fund and Leshan Sumin; and
(iv) the Acting in Concert Agreement between Jiangsu Zhongneng and the Leshan Fund.
2. DISPOSAL OF EQUITY INTEREST IN INNER MONGOLIA ZHONGHUAN-GCL AND PUT OPTION
2.1 The Share Purchase Agreements
The principal terms of the Share Purchase Agreements are set out below:
Date
26 February 2021 (after trading hours)
Parties
(i) The Seller: Jiangsu Zhongneng
(ii) The Purchaser: the Leshan Fund
Assets to be Sold
As at the date of this announcement, Jiangsu Zhongneng directly holds 9.623% of Inner Mongolia Zhonghuan-GCL. Pursuant to the Share Purchase Agreements, Jiangsu Zhongneng will sell 3.848% equity interest in Inner Mongolia Zhonghuan-GCL to the Leshan Fund.
For information relating to Inner Mongolia Zhonghuan-GCL, please refer to the section headed ''INFORMATION ON INNER MONGOLIA ZHONGHUAN-GCL'' below.
Consideration
The Consideration under the Share Purchase Agreements shall be RMB600,000,000.
Basis of the Consideration
The Consideration was determined after arm's length negotiations between Jiangsu Zhongneng and the Leshan Fund, taking into account, among other things:
(i) the net asset value of Inner Mongolia Zhonghuan-GCL as at the Reference Date;
(ii) the profitability of Inner Mongolia Zhonghuan-GCL for the financial years ended 31 December 2019 and 31 December 2018, details of which can be
found in the section headed ''INFORMATION ON INNER MONGOLIA ZHONGHUAN-GCL'' of this announcement;
(iii) the cash flow position of Inner Mongolia Zhonghuan-GCL as at the Reference Date; and
(iv) an independent valuation report obtained by Jiangsu Zhongneng.
Payment Arrangement of the Consideration
The Leshan Fund shall pay the Consideration to Jiangsu Zhongneng upon Closing.
However, if Jiangsu Zhongneng and Leshan Zhongping Nengxin Corporate Management and Consulting Partnership (Limited Partnership)* (樂山市中平能 鑫企業管理諮詢合夥企業（ 有限合夥）) (''Zhongping Nengxin'') (each as limited partners) pay the contributions to the Leshan Fund in instalments, upon Closing, the Leshan Fund shall pay in instalments correspondingly on a pro-rata basis. The payment date shall be within three working days from the receipt of the contributions by the Leshan Fund.
For details of contributions by Jiangsu Zhongneng and Zhongping Nengxin, please refer to item (xiv) under ''Conditions Precedent'' below.
Conditions Precedent
The Closing under the Share Purchase Agreements is subject to the fulfilment of all of the following conditions:
(i) relevant transaction documents having been properly signed by both parties and become effective;
(ii) the shareholders of Inner Mongolia Zhonghuan-GCL having approved the
Disposal, which includes at least the following:
(1) matters related to the equity transfer; and
(2) that each existing shareholder of Inner Mongolia Zhonghuan-GCL waived any statutory or agreed pre-emptive right to the Target Equity;
(iii) the internal decision-making body of the Leshan Fund having passed a resolution to approve the Disposal;
(iv) the board of directors of both Jiangsu Zhongneng and its controlling shareholders having passed resolutions approving the signing, delivery and performance of the relevant transaction documents to which they are parties, which for the avoidance of doubt, shall include (1) the resolution of the general meeting of Jiangsu Zhongneng; and (2) the resolution of the Board of the Company;
(v) the transaction documents related to the Disposal having been agreed, approved, registered and/or filed by the third parties and/or the relevant government departments;
(vi) Inner Mongolia Zhonghuan-GCL having obtained the written consent/approval of the relevant institutes for the Disposal;
(vii) the Leshan Fund having completed its business, financial and legal due diligence of Inner Mongolia Zhonghuan-GCL, and the Leshan Fund being satisfied with the results of such due diligence;
(viii) Inner Mongolia Zhonghuan-GCL not having any litigation, arbitration or other dispute proceedings that have or are reasonably expected to have an adverse impact on the legality of the Disposal and the transaction documents, or litigation, arbitration or other dispute proceedings that have a material adverse impact on the operation or the situation of Inner Mongolia Zhonghuan-GCL; there are no judgments, adjudications, rulings or injunctions of courts, arbitration institutions or relevant government authorities that restrict, prohibit or abolish the Disposal, and there are no pending or potential litigations, arbitrations, judgments, adjudications, rulings or injunctions that have or will have a material adverse impact on the Disposal;
(ix) the representations and warranties made by Jiangsu Zhongneng remaining true, accurate, complete, sufficient, unconditional and unreserved from the signing date of this agreement (including the signing date of this agreement)
to the payment date (including the payment date);
(x) Jiangsu Zhongneng having properly performed or complied with its undertakings, obligations and agreements under this agreement on or before the payment date;
(xi) there being no effective laws of the PRC or other applicable laws or agreements, contracts or documents that prohibit or restrict the completion of the Disposal, or that have a material and adverse impact on the ownership, operation or control of the principal business and the relevant assets of Inner Mongolia Zhonghuan-GCL;
(xii)there being no substantial changes in all aspects of Inner Mongolia
Zhonghuan-GCL (such as changes in shareholding structure, legal, commercial, technical, financial, tax or market environments) which result in a material adverse impact on the overall financial position, prospects, operating results, general business status, equity or the value of the major assets of Inner Mongolia Zhonghuan-GCL, and there having not been any events or facts that may result in such changes;
(xiii) the corresponding registration of the changes and/or filing application in relation to the Disposal having been submitted by Inner Mongolia Zhonghuan-GCL and accepted by the competent market supervision and administration department, which has provided an acceptance notice to the Leshan Fund; and
(xiv) Jiangsu Zhongneng having made the capital contribution of a total of no less than RMB600 million in total to the Leshan Fund either directly as limited partner of the Leshan Fund or as the limited partner of Zhongping Nengxin (another limited partner of the Leshan Fund).
Closing
Closing shall take place within three working days after the fulfilment or waiver of the conditions precedent above in writing by the Leshan Fund.
Grant of Put Option
The parties agreed that the Leshan Fund has the right to require Jiangsu Zhongneng (or an investor designated by Jiangsu Zhongneng) to purchase the Target Equity at the repurchase price below if as at the date of expiry of five years from the payment of the first instalment of the Consideration (the ''Investment Term''), Inner Mongolia Zhonghuan-GCL has not been merged and acquired by a third party company (hereinafter referred to as ''Eligible Merger
and Acquisition'').
If the Put Option is exercised, Jiangsu Zhongneng (or the investor designated by Jiangsu Zhongneng) shall repurchase the Target Equity by issuing shares and/or in cash within the Investment Term.
Repurchase Price
If the repurchase situation above is triggered, Jiangsu Zhongneng will repurchase the Target Equity at a repurchase price equal to the sum of the Consideration and the amount derived from the annualised simple interest rate of 8% of this investment. For the avoidance of doubt, the repurchase price shall be net of any compensation paid by Jiangsu Zhongneng for the transfer and dividends distributed by Inner Mongolia Zhonghuan-GCL.
Shortfall Compensation
In the event of an Eligible Merger and Acquisition, if the market value of the shares and/or cash received by the Leshan Fund falls short of the repurchase price, Jiangsu Zhongneng shall provide cash compensation for the shortfall.
Jiangsu Zhongneng shall confirm the repurchase price or the amount of shortfall compensation within 20 days from the date of receipt of the repurchase notice or the shortfall notice, and pay such amount in full 30 days after the reply or within the payment period agreed by both parties.
If Jiangsu Zhongneng objects to the amount specified in the repurchase notice or the shortfall notice, it may reply within 20 days after such notice is given by the Leshan Fund. If the parties fail to reach an agreement within 20 days, Jiangsu Zhongneng shall pay the amount specified in the repurchase notice or the shortfall notice within 30 days after the objection notice is given.
2.2 Financial Impact of the Disposal
After completion, Inner Mongolia Zhonghuan-GCL will be an associate of the Company. Subject to audit, it is expected that the Group will recognise a profit approximately RMB150 million.
2.3 Use of Proceeds from the Disposal
The net cash proceeds (net of estimated taxes and transaction costs) from the Disposal is expected to be approximately RMB600 million, which the Company intends to use for the capital contribution to the Leshan Fund.
3. TRANSACTIONS RELATING TO LESHAN SUMIN
3.1 The Leshan Sumin Equity Transfer Agreement
The principal terms of the Leshan Sumin Equity Transfer Agreement are set out below:
Date
26 February 2021 (after trading hours)
Parties
(i) The Seller: Jiangsu Zhongneng
(ii) The Purchaser: the Leshan Fund
As disclosed in the Company's clarification announcement dated 16 October 2020, Wu Guojing and Fu Xuguang, the only equity holders of Leshan Guangyang, are both full-time employees of Jiangsu Zhongneng and hold their entire equity interest in Leshan Guangyang for and on behalf of Jiangsu Zhongneng. On 29 December 2020, Leshan Guangyang transferred their entire equity interest in Leshan Sumin to Jiangsu Zhongneng for a nominal consideration of RMB1.00. As at the date of this announcement, Leshan Sumin is an indirect wholly-owned subsidiary of the Company.
Assets to be Sold
As at the date of this announcement, Jiangsu Zhongneng owns 100% of Leshan Sumin. Pursuant to the Leshan Sumin Equity Transfer Agreement, Jiangsu Zhongneng will sell 86.67% equity interest in Leshan Sumin to the Leshan Fund.
Consideration
The consideration under the Leshan Sumin Equity Transfer Agreement is RMB1.00.
Basis of Consideration
As at the date of this announcement, the registered capital of Leshan Sumin is RMB1.5 billion, which remains outstanding pending contribution by its sole shareholder, Jiangsu Zhongneng.
In acquiring the 86.67% equity interest in Leshan Sumin, the Leshan Fund has committed to contribute RMB1.3 billion, representing 86.67% of the registered capital. As a result, the consideration of the Leshan Sumin Equity Transfer Agreement is nominal in nature and set at RMB1.00.
The nominal consideration of RMB1.00 was determined after arm's length negotiations between Jiangsu Zhongneng and the Leshan Fund, taking into account, among others, the net asset value of Leshan Sumin as at the Reference Date and the above.
Payment Arrangement of the Consideration
The Leshan Fund shall pay the RMB1.00 consideration to Jiangsu Zhongneng within five (5) days of the completion of the AIC registration in relation to the equity transfer.
Conditions Precedent
Closing under the Leshan Sumin Equity Transfer Agreement is subject to the fulfilment of the following conditions:
(i) the Leshan Sumin Equity Transfer Agreement being effective;
(ii) the limited partners of the Leshan Fund having made the first two stages of capital contribution in accordance with the limited partnership agreement; and
(iii) the Leshan Fund and Jiangsu Zhongneng obtaining all necessary internal approvals for the transaction in accordance with applicable laws, constitutional documents and other internal documents.
Closing
Closing under the Leshan Sumin Equity Transfer Agreement takes place upon the following have been completed:
(i) the Leshan Sumin Equity Transfer Agreement being effective;
(ii) Leshan Sumin obtaining all necessary internal approvals for the transaction in accordance with applicable laws, constitutional documents and other internal documents;
(iii) amendment of the constitutional document of Leshan Sumin in accordance with the Leshan Sumin Equity Transfer Agreement; and
(iv) Leshan Sumin completing AIC registration in relation to the transfer and obtaining the new business license issued by relevant PRC authorities.
For the avoidance of doubt, if the limited partners of the Leshan Fund make the first two stage capital contribution in multiple instalments, the transfer of equity interest in Leshan Sumin will also be made in equivalent instalments. The transfer of equity interest in Leshan Sumin will be proportionate to the actual contributions received by the Leshan Fund from its limited partners.
3.2 The Leshan Sumin Capital Increase Agreement
The principal terms of the Leshan Sumin Capital Increase Agreement are set out below:
Date
26 February 2021 (after trading hours)
Parties
(i) Jiangsu Zhongneng
(ii) The Leshan Fund
(iii) Leshan Guangyang
(iv) Leshan Sumin
Subject matter
Immediately after the closing of the Leshan Sumin Capital Increase Agreement, the shareholding structure of Leshan Sumin is as follows:
Subscribed contribution to
Shareholder | registered capital | Shareholding percentage |
The Leshan Fund | RMB1.3 billion | 86.67% |
Jiangsu Zhongneng | RMB200 million | 13.33% |
Total | RMB1.5 billion | 100% |
As at the date of this announcement, the registered capital of Leshan Sumin is RMB1.5 billion, which remains outstanding pending contribution by the Leshan Fund and Jiangsu Zhongneng.
Pursuant to the Leshan Sumin Capital Increase Agreement:
(i) the Leshan Fund has committed to an increased contribution to the registered capital of Leshan Sumin from RMB1.3 billion to RMB1.9 billion;
(ii) Jiangsu Zhongneng has committed to an increased contribution to the registered capital of Leshan Sumin from RMB200 million to RMB1 billion; and
(iii) Leshan Guangyang has committed to a contribution to the registered capital of Leshan Sumin of RMB245 million,
together as the ''Additional Capital Contribution''.
Leshan Guangyang is intended to be used as a shareholding platform as an incentive scheme for the employees of the Company.
Jiangsu Zhongneng agreed to waive its pre-emptive right to subscribe for a pro-rata equity interest in Leshan Sumin.
Jiangsu Zhongneng is not required to make any additional capital contribution to the Leshan Fund (either directly as an LP to the Leshan Fund or indirectly as an LP to Zhongping Nengxin), as a result of the Leshan Sumin Capital Increase Agreement.
Immediately following the completion of the Additional Capital Contribution, the shareholding structure of Leshan Sumin will be as follows:
Subscribed contribution to
Shareholder | registered capital | Shareholding percentage |
The Leshan Fund | RMB1.9 billion | 60.41% |
Jiangsu Zhongneng | RMB1 billion | 31.80% |
Leshan Guangyang | RMB245 million | 7.79% |
Total | RMB3.145 billion | 100% |
The Leshan Fund shall pay the actual capital contribution to the registered capital of Leshan Sumin in accordance with the progress of the project.
Jiangsu Zhongneng and Leshan Guangyang shall pay the actual capital contribution to the registered capital of Leshan Sumin within five (5) years of the date of the Leshan Sumin Capital Increase Agreement. If Jiangsu Zhongneng or Leshan Guangyang fails to complete the payment of capital contribution in accordance with the Leshan Sumin Capital Increase Agreement, the Leshan Fund is entitled to purchase all unpaid equity interest in Leshan Sumin owned by Jiangsu Zhongneng or Leshan Guangyang (as the case may be) at nil consideration.
Pursuant to the Leshan Sumin Capital Increase Agreement. the Leshan Fund unconditionally and unequivocally undertook that it shall appoint two nominees of Jiangsu Zhongneng as the directors of Leshan Sumin in exercising its rights in appointing three directors of Leshan Sumin pursuant to the Leshan Sumin Shareholders' Agreement, and shall change or remove such directors as requested by Jiangsu Zhongneng in order to maintain the control of Jiangsu Zhongneng by appointing four of the five directors in Leshan Sumin.
Financial Impact of the transactions
Leshan Sumin will remain as a subsidiary of the Company and its financial statements will continue to be consolidated.
The Company will hold 31.80% of Leshan Sumin's equity through Jiangsu Zhongneng. The Leshan Fund (to which Jiangsu Zhongneng is an LP and will directly and indirectly through Zhongping Nengxin invest RMB1.5 billion, being approximately 43.45% of the Leshan Fund's initially paid-up shares) will hold 60.41% of Leshan Sumin's equity. Leshan Guangyang, which is currently held by two full-time employees of Jiangsu Zhongneng for and on behalf of Jiangsu Zhongneng, will hold 7.79% of Leshan Sumin.
3.3 The Leshan Sumin Shareholders' Agreement
The principal terms of the Leshan Sumin Shareholders' Agreement are set out below:
Date
26 February 2021 (after trading hours)
Parties
(i) Jiangsu Zhongneng
(ii) The Leshan Fund
(iii) Leshan Sumin
Composition of the Board and the Supervisory Board
The board of directors of Leshan Sumin will comprise five directors. The Leshan Fund is entitled to appoint three directors in total, two of which shall be nominated by Jiangsu Zhongneng pursuant to the Leshan Sumin Capital Increase Agreement. One of the directors appointed by the Leshan Fund will also be the chairman of the board. Jiangsu Zhongneng is entitled to appoint two directors. However, pursuant to the Leshan Sumin Capital Increase Agreement, the Leshan Fund has separately unconditionally and unequivocally undertook that it shall appoint two nominees of Jiangsu Zhongneng as the directors of Leshan Sumin, meaning Jiangsu Zhongneng effectively has the right to appoint four out of five directors in Leshan Sumin. Please refer to the section headed ''The Leshan Sumin Capital Increase Agreement'' for further information. Each director will have a renewable term of three (3) years.
The supervisory board of Leshan Sumin will comprise three members: (i) two non-staff members will be appointed by the Leshan Fund and as approved in the shareholders' meeting; and (ii) one staff member will be elected by the staff (representative) union of Leshan Sumin. Each member will have a renewable term of three (3) years. One of the non-staff members appointed by the Leshan Fund shall be the chairman of the supervisory board.
Pre-Emptive Rights
Pursuant to the Leshan Sumin Shareholders' Agreement, and subject to the approval in the shareholders' meeting, the registered capital of Leshan Sumin can be increased to attract new investors. In the event of any proposed increase in the registered capital of Leshan Sumin, the Leshan Fund shall have a pre-emptive right to subscribe the additional registered capital and on equal terms. The registered capital subscribed by Jiangsu Zhongneng shall remain unchanged.
Under the following circumstances, no shareholder of Leshan Sumin shall have any pre-emption rights with respect to the additional registered capital of Leshan Sumin:
(i) additional registered capital or equity options issued for the implementation of any employee equity incentive plan or equity-related compensation plan approved in a shareholders' meeting, or additional registered capital based on equity options;
(ii) the increase in registered capital for the acquisition of other entities or undertakings or merger with other entities as approved in a shareholders' meeting; or
(iii) additional registered capital as a result of undistributed profit or transfers of capital reserve into registered capital as approved in a shareholders' meeting.
3.4 The Acting in Concert Agreement
The principal terms of the Acting in Concert Agreement are set out below:
Date
26 February 2021 (after trading hours)
Parties
(i) Jiangsu Zhongneng
(ii) The Leshan Fund
Subject Matter
Pursuant to the Acting in Concert Agreement, when dealing with affairs related to Leshan Sumin requiring consideration and approval by shareholders at general meetings, the Leshan Fund shall vote in accordance with Jiangsu Zhongneng's instruction, except:
(i) any connected transactions of the company involving Leshan Sumin or any transactions involving the company or its affiliates; or
(ii) any matter that obviously harms the interest of Leshan Sumin or the Leshan
Fund.
4. INFORMATION ON THE GROUP AND JIANGSU ZHONGNENG
The Group
The Company is an exempted company with limited liability incorporated in the Cayman Islands. The principal business of the Company is investment holding.
The Group is principally engaged in the manufacturing and sale of polysilicon and wafers products, and developing and operating solar farms.
Jiangsu Zhongneng
Jiangsu Zhongneng is a company established in the PRC with limited liability, and is an indirect wholly-owned subsidiary of the Company. Jiangsu Zhongneng mainly engages in the manufacturing and sale of polysilicon, and its major operating assets include polysilicon manufacturing plants as well as the equipment and machines of such plants and manufacturing plants.
5. INFORMATION ON THE LESHAN FUND
The Leshan Fund
We refer to the announcement of the Company dated 31 May 2019 in relation to the establishment of the Leshan Fund. As disclosed in the announcement, the Leshan Fund is a limited partnership established under the laws of the PRC, and its general partner is the General Partner, a limited company incorporated in the PRC. As at the date of this announcement, Jiangsu Zhongneng is a limited partner of the Leshan Fund and will invest RMB1,500,000,000 in the Leshan Fund. Save as disclosed above, to the best of the Directors' knowledge, information and belief after making all reasonable enquiries, the Leshan Fund, the General Partner and their ultimate beneficial owners are third parties independent of the Company and its connected persons.
NumberName
1
Leshan Gaoxin Investment
Development (Group) Limited* (樂山高新投資發展（ 集團）有限公 司) (''Leshan Gaoxin'')
2
Zhongping Nengxin
3
Chengdu Chuanshang Yishiyi Hao
Enterprise Management and Consultation Center (Limited Partnership)* (成都川商壹拾壹號 企業管理諮詢中心（ 有限合夥))
(''Chuanshang Fund'')
4
Jiangsu Zhongneng
5
General Partner
PartnershipLicense Number
Limited partner
91511100731590868MLimited partner
91511100MA67WWWN8NLimited partner
91510104MA6B793R0YLimited partner
913203017849976109
General partner
91540195MA6T37BC87
Address
No. 489 Angang Road,
Leshan Gaoxin District, Sichuan Province
No. 7, 12/F, No. 489
Angang Road, Leshan Gaoxin District, Sichuan Province
No. 407, Block 1, Jialin
Kechuang Building, No. 138 Jinsheng Road, Jinjiang Industrial Area, Chengdu City, Sichuan Province
No. 66 Yangshan Road,
Xuzhou Economic and Technology Development District, Jiangsu Province
Room 308-32, Liuwu
Building, Liuwu New Area, Lhasa City, Tibet Autonomous Region
Shanghai Zhongping Guoyu Assets Management Limited* (ɪऎʕ̻⒠༟ପ ၍ଣϞࠢʮ̡) (GP) | Jiangsu Zhongneng (LP) (a wholly-owned subsidiary of the Company) | Shanghai Zhongping Guojing M&A Equity Investment Fund Partnership (Limited Partnership)* (ɪऎʕ̻ዽԻᒅٰᛆ ҳ༟ਿږΥྫΆุ €ϞࠢΥྫ㕙) (LP) | Huang Zhenghong (ර͍ߎ) (LP) |
RMB2 million
Tibet Zhongping (GP) | Leshan Gaoxin (LP) | Chuanshang Fund (LP) | Zhongping Nengxin (LP) | Jiangsu Zhongneng (LP) (a wholly-owned subsidiary of the Company) |
Subscribed: RMB500 million Initially paid-up: RMB500 million
Leshan Zhongping Polysilicon Photovoltaic Information Industry Investment Fund*
(ᆀʆ̹̻ε౺ᾼΈཥڦࢹପุਿږ)
(Total size: RMB4.502 billion, initially paid-up: RMB3.452 billion)
6. INFORMATION ON LESHAN GUANGYANG
Leshan Guangyang is a partnership established in the PRC with limited liability. As at the date of this announcement, Wu Guojing and Fu Xuguang, the only equity holders of Leshan Guangyang, are both full-time employees of Jiangsu Zhongneng and hold their entire equity interest in Leshan Guangyang for and on behalf of Jiangsu Zhongneng. In the future, Leshan Guangyang is intended to be used as an employee shareholding platform as an incentive scheme for the employees of the Company.
7. INFORMATION ON INNER MONGOLIA ZHONGHUAN-GCL
Inner Mongolia Zhonghuan-GCL is a company incorporated in the PRC with limited liability and is principally engaged in the processing of solar grade silicon rods, monosilicon and polysilicon materials. Its scope of business includes the self-operation and acting as the agent of the import and export of various goods and technologies, except for those restricted to be operated by designated companies or prohibited for import and export by the state.
As at the date of this announcement, the Company holds 9.623% and 6.416% of Inner Mongolia Zhonghuan-GCL through its wholly-owned subsidiary, Jiangsu Zhongneng, and its non-wholly owned subsidiary, Konca Solar Cell Co., Ltd., respectively.
The following table sets forth an extract of the audited financial statements of Inner Mongolia Zhonghuan-GCL for each of the financial years ended 31 December 2019 and 31 December 2018 prepared in accordance with China Accounting Standards:
For the year ended
31 December
2019 | 2018 | |
audited | audited | |
RMB'000 | RMB'000 | |
Net profit before tax | 1,172,927 | 457,378 |
Net profit after tax | 1,016,015 | 411,469 |
The net asset value of Inner Mongolia Zhonghuan-GCL is approximately RMB8.07 billion, which is extracted from the unaudited management account for the six months ended 30 June 2020 prepared by Inner Mongolia Zhonghuan-GCL in accordance with China Accounting Standards.
8. INFORMATION ON LESHAN SUMIN
Leshan Sumin is a company established in the PRC with limited liability and is an indirect wholly-owned subsidiary of the Company. Jiangsu Zhongneng authorized Leshan Sumin to commence the preparation and environment assessment works for the construction of granular silicon project in Wutongqiao District, Leshan City, Sichuan. Leshan Sumin acts as the operating entity for the fluidized bed reactor granular silicon project in Leshan. It currently has not commenced operations and does not own any assets.
9. REASONS FOR AND BENEFITS OF THE TRANSACTIONS
Disposal of Equity Interest in Inner Mongolia Zhonghuan-GCL and Put Option
The transfer of part of the Company's investment in Inner Mongolia Zhonghuan-GCL to the Leshan Fund will enhance the Company's future expansion in production capacity of granular silicon based on its ground-breaking technologies. Such transfer will increase the Company's market share in this niche market segment without increasing the Company's gearing ratio and reduce its cash commitment. The Company's influence on Inner Mongolia Zhonghuan-GCL is maintained with its right to appoint one director on the board and by holding 12.191% interests indirectly through its wholly-owned subsidiary, Jiangsu Zhongneng, and its non-wholly owned subsidiary, Konca Solar Cell Co., Ltd. Based on the above reasons and having considered all relevant factors, the Directors believe and consider that the terms of the Disposal are on normal commercial terms, are fair and reasonable and in the interests of the Company and the Shareholders as a whole.
Transactions relating to Leshan Sumin
Consistent with the above, it is the Company's strategy to maintain a reasonable gearing ratio while continuing a healthy speed of development, which is in the interests of the Company and the Shareholders as a whole.
Leveraging on external source of financing in development of the Company's major technologies will allow the Company's position to stay ahead of the fierce competition in the solar material industry and maintain a reasonable gearing ratio. Based on the above reasons and having considered all relevant factors, the Directors believe and consider that the terms of the Disposal are on normal commercial terms, are fair and reasonable and in the interests of the Company and the Shareholders as a whole.
10. LISTING RULES IMPLICATIONS
As the highest applicable percentage ratio in respect of the Disposal exceeds 5% but is less than 25%, the entering into of the Disposal constitutes a discloseable transaction of the Company and is therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.
The Put Option is exercisable at the discretion of the Leshan Fund upon the occurrence of certain specified events, with the exercise price of the Put Option to be determined in accordance with the terms of the Share Purchase Agreements. As the highest applicable percentage ratio in respect of the Jiangsu Zhongneng Put Option exceeds 5% but is less than 25%, the grant of the Put Option constitutes a discloseable transaction of the Company and is therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.
As the highest applicable percentage ratios in respect of the transactions contemplated under the Leshan Sumin Equity Transfer Agreement and the Leshan Sumin Capital Increase Agreement (in aggregate) does not exceed 5%, they do not constitute notifiable transactions of the Company under Chapter 14 of the Listing Rules.
11. DEFINITIONS
In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings:
''Acting in Concert | the acting in concert agreement dated 26 February 2021 |
Agreement'' | between Jiangsu Zhongneng and the Leshan Fund |
''Board'' | the board of directors of the Company |
''Closing'' | closing of the Disposal pursuant to the Share Purchase |
Agreements | |
''Closing Date'' | the date when Closing occurs |
''Company'' | GCL-Poly Energy Holdings Limited, a company |
incorporated in the Cayman Islands with limited liability, | |
the shares of which are listed on the Main Board of the | |
Stock Exchange (stock code: 3800) | |
''Conditions | the conditions set out in the section headed ''Conditions |
Precedent'' | Precedent'' of this announcement |
''connected | has the same meaning ascribed to it by the Listing Rules |
person(s)'' | |
''Director(s)'' | the director(s) of the Company |
''Disposal'' | the disposal of Target Equity by Jiangsu Zhongneng to the |
Leshan Fund as contemplated under the Share Purchase | |
Agreements | |
''General Partner'' | Tibet Zhongping Enterprise Management Co., Ltd.* |
(西藏仲平企業管理有限公司 ), a limited company | |
incorporated in the PRC | |
''Group'' | the Company and its subsidiaries |
''Hong Kong'' | the Special Administrative Region of Hong Kong of the |
PRC | |
''Inner Mongolia | Inner Mongolia Zhonghuan-GCL Solar Material Co., Ltd.* |
Zhonghuan-GCL'' | (內蒙古中環協鑫光伏材料有限公司), a company established |
in the PRC with limited liability | |
''Jiangsu Zhongneng'' | Jiangsu Zhongneng Polysilicon Technology Development |
Co., Ltd.* (江蘇中能硅業科技發展有限公司), a company | |
established in the PRC with limited liability, and is an | |
indirect wholly-owned subsidiary of the Company | |
''Leshan Fund'' | Leshan Zhongping Polysilicon Photovoltaic Information |
Industry Investment Fund Partnership (Limited | |
Partnership)* (樂山市仲平多晶硅光電信息產業基金合夥企 | |
業（ 有限合夥）), a partnership established in the PRC with | |
limited liability | |
''Leshan Guangyang'' | Leshan Guangyang Technology Development Partnership |
(Limited Partnership)* (樂山光揚科技開發合夥企業（ 有限合 | |
夥）), a partnership established in the PRC with limited | |
liability | |
''Leshan Sumin'' | Leshan Sumin New Energy Technology Co., Ltd.* (樂山蘇 |
民新能源科技有限公司), a company established in the PRC | |
with limited liability | |
''Leshan Sumin | the capital increase agreement dated 26 February 2021 |
Capital Increase | between Jiangsu Zhongneng, the Leshan Fund, Leshan |
Agreement'' | Guangyang and Leshan Sumin |
''Leshan Sumin | the equity transfer agreement dated 26 February 2021 |
Equity Transfer | between Jiangsu Zhongneng and the Leshan Fund in |
Agreement'' | relation to the sale of 86.67% equity interest in Leshan |
Sumin |
''Leshan Sumin | the shareholders' agreement dated 26 February 2021 |
Shareholders' | between Jiangsu Zhongneng, the Leshan Fund and Leshan |
Agreement'' | Sumin |
''Listing Rules'' | the Rules Governing the Listing of Securities on the Stock |
Exchange | |
''PRC'' | the People's Republic of China, and for the purpose of this |
announcement, excluding Hong Kong, the Special | |
Administrative Region of Macau of the People's Republic | |
of China and Taiwan | |
''Put Option'' | the Put Option granted to the Purchaser under the Share |
Purchase Agreements, pursuant to which the Leshan Fund is | |
entitled to require Jiangsu Zhongneng to repurchase the | |
Target Equity in Inner Mongolia Zhonghuan-GCL upon the | |
occurrence of certain specific events related to Inner | |
Mongolia Zhonghuan-GCL | |
''Reference Date'' | 31 March 2020 |
''Registration | the registration procedures on the change of shareholders of |
Procedures'' | Inner Mongolia Zhonghuan-GCL and other relevant filing |
procedures in the PRC in relation to the Disposal | |
''RMB'' | Renminbi, the legal currency of the PRC |
''Share Purchase | the share purchase agreements dated 26 February 2021 |
Agreements'' | between Jiangsu Zhongneng and the Leshan Fund in |
relation to the sale of 3.848% equity interest in Inner | |
Mongolia Zhonghuan-GCL | |
''Shareholder(s)'' | the shareholder(s) of the Company |
''Stock Exchange'' | The Stock Exchange of Hong Kong Limited |
''subsidiary(ies)'' | has the same meaning ascribed to it by the Listing Rules |
''Zhongping | Leshan Zhongping Nengxin Corporate Management and |
Nengxin'' | Consulting Partnership (Limited Partnership)* (樂山市 |
中平能鑫企業管理諮詢合夥企業（ 有限合夥）), a partnership | |
established in the PRC with limited liability |
''%'' per cent
*
For identification purposes only
By order of the Board GCL-Poly Energy Holdings Limited
Zhu Gongshan
Chairman
Hong Kong, 28 February 2021
As at the date of this announcement, the Board comprises Mr. Zhu Gongshan (Chairman), Mr. Zhu Zhanjun, Mr. Zhu Yufeng, Ms. Sun Wei, Mr. Yeung Man Chung, Charles, Mr. Jiang Wenwu and Mr. Zheng Xiongjiu as executive Directors; Ir. Dr. Raymond Ho Chung Tai, Mr. Yip Tai Him, Dr. Shen Wenzhong and Mr. Wong Man Chung, Francis as independent non-executive Directors.
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GCL-Poly Energy Holdings Ltd. published this content on 28 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 February 2021 10:09:01 UTC.
