By Colleen Howe
BEIJING (Reuters) -China’s GCL Technology said on Tuesday that it plans to issue shares to raise money for supply-side reforms in polysilicon, a building block for solar cells.
GCL will use an estimated HK$3.505 billion ($450.66 million) in proceeds from the share issuance for “establishing a capital reserve for the reform of the supply-side to promote the structural adjustment of polysilicon production capacity”, as well as for growing other business lines, it said in a Hong Kong stock exchange filing.
In late July, GCL detailed plans by China’s largest polysilicon producers to create a 50 billion yuan ($7 billion) fund to acquire and shut at least 1 million metric tons of lower-quality polysilicon capacity, in a bid to pare back overcapacity in the industry and boost prices. But analysts cautioned the highly indebted sector could struggle to raise the necessary financing.
GCL will also put some of the capital into its silane gas business. It said demand for silane gas is growing because of the transition to back-contact solar cells, which have all electrical contacts on the rear side of the cell, so the entire front surface of the cell can be exposed to sunlight.
The company will also raise another HK$1.887 billion for working capital purposes and loan repayment.
($1 = 7.7775 Hong Kong dollars)
(Reporting by Colleen Howe; Editing by Rashmi Aich)
