GCL-Poly Says China’s Wealth Fund Sells 1.2 Billion Shares

Jan 09, 2014 9:22 pm ET

(Update with share price in third paragraph)

Jan. 10 (Bloomberg) -- GCL-Poly Energy Holdings Ltd., the world’s biggest polysilicon maker, said China’s sovereign wealth fund will sell 1.2 billion company shares at HK$2.60 each.

The sale by Chengdong Investment Corp., a unit of China Investment Corp., will cut its stake to 4.57 percent from 12.3 percent, GCL-Poly said in a Hong Kong stock exchange filing yesterday after the market closed.

The stock of GCL-Poly fell as much as 7.8 percent, headed for its biggest decline since June, to HK$2.60 and traded at HK$2.66 as of 9:52 a.m. in Hong Kong trading. The drop trimmed GCL-Poly’s gain this year to 10 percent after prices of polysilicon advanced to the highest since October 2012.

Polysilicon prices recovered from a December 2012 record low early last year after producers cut output to curb a supply glut. The average spot price rose last week at the fastest pace since June, advancing 2.6 percent to $18.32 a kilogram compared with $17.86 a week earlier, according to data compiled by Bloomberg.

Chengdong’s sale price is at the bottom of the range of HK$2.60 to HK$2.65 it was seeking, according to a term sheet obtained by Bloomberg News yesterday. China International Capital Corp. was sole placing agent, according to the terms.

At HK$2.60 a share, Chengdong will generate HK$3.12 billion ($402 million) from the sale of the 7.75 percent stake in Hong Kong-based GCL-Poly. The divestment is scheduled for completion by Jan. 14, GCL-Poly said.

“To the best knowledge of the company, the transaction is carried out based on Chengdong’s own business decision,,” GCL- Poly said. “Chengdong still supports the business development of the Company.”

China Investment Corp. sold 1.2 billion shares in GCL-Poly at HK$1.87 each on June 20, cutting its stake to 12.37 percent from 20.13 percent, according to a disclosure filing at the time to Hong Kong’s stock exchange.

--With assistance from Feifei Shen in Beijing. Editors: James Callan, Stephen West