PAG Invests $200M In GCL-Poly Energy

Hong Kong-listed Chinese solar panel producer GCL-Poly Energy Holdings has received US$200 million investment from Asian alternative investment firm PAG, according to a company announcement.

Formerly known as Pacific Alliance Group, the Hong Kong-based PAG acquired convertible bonds worth of around US$200 million issued by GCL-Poly.

The convertible bonds have an annual coupon of 0.75% with a five-year maturity and a three-year put option. The bonds can be converted at HK$3.125 a piece to GCL-Poly’s shares, representing a 21.6% premium of GCL-Poly’s closing price before the deal’s announcement.

If fully converted into equity, PAG will hold up to a 3.5% stake in the company.

GCL-Poly may sell a further US$28.2 million worth of convertible bonds to China Investment Corp. (CIC) if the Chinese sovereign wealth fund chooses to exercise its anti-dilution right to maintain its current shareholding.

CIC acquired a 20% stake in GCL-Poly in 2009 but sold part of that through a US$287 million block trade in June 2013. It currently holds 12.4% of GCL-Poly, and is the second largest shareholder after chairman Zhu Gongshan, who owns 32.4% together with his associates.

GCL-Poly said that it will use the capital raised for capital expenditure and general corporate purposes.

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