|    |  EN

Company News

GCL New Energy Holdings Limited Enters into Strategic Cooperation with Sumin Investment Pushing Forward the Solar Development
2017-11-23

(23 November 2017, Hong Kong) The GCL New Energy Holding Limited (“GCL New Energy” or the “Company”, Stock Code: 451.HK) Board, is pleased to announce that its indirectly wholly-owned subsidiaries, Suzhou GCL New Energy and Nanjing GCL New Energy entered into the Capital Increase Agreements with Sumin Ruineng on 22 November 2017, a subsidiary of Sumin Investment. Pursuant to the Agreements, Sumin Ruineng agreed to make the Capital Increase in an aggregate amount of RMB1.5 billion to Suzhou GCL New Energy, of which approximately RMB928 million would be used as the registered capital of Suzhou GCL New Energy and the remaining approximately RMB572 million would be used as the capital reserve of Suzhou GCL New Energy to repay debts, develop the principle business and replenish liquidity. Upon completion of the Capital Increase, Nanjing GCL New Energy and Sumin Ruineng will hold 92.82% and 7.18% equity interest in Suzhou GCL New Energy, respectively.

This agreement is one of the company’s transformation and upgrade in 5 key areas – introducing strategic partner to form strategic partnership for transforming from solely-owned operations to strategic cooperation. The GNE Directors are of the view that Sumin Investment as the provincial-level private Investment consortium represents a valuable opportunity for the GNE Group to bring in an investor with strong financial background. The GNE Directors consider that the Capital Increase can facilitate the strategic cooperation with Sumin Investment. Entering into the Capital Increase Agreements could raise a substantial amount of additional capital funds for the Group and reduce gearing ratio; improve the financial and liquidity position of the Group; and provide the financial flexibility necessary for the Group’s future business development and the capability to capture any prospective investment opportunities.

GNE intends to use the funds to be raised from the Capital Increase to repay debts and expand the GNE Group's business in the renewable energy sector, including development, acquisition of or investment in new or existing solar power plants, solar projects, solar energy assets or other projects with high potentials.

For the details of the Co-operation Framework Agreement, please refer to the announcement.