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Suzhou GCL New Energy has entered into a co-operation framework agreement with Fuyang New Energy
2017-05-31

(31 May 2017, Hong Kong) GCL New Energy Holdings Limited (“GCL New Energy” or the “Company”, Stock Code: 451.HK) is pleased to announce Suzhou GCL New Energy Investment Company Limited (“Suzhou GCL New Energy”),an indirectly wholly-owned subsidiary of the company, which has entered into a co-operation framework agreement (the “Co-operation Framework Agreement’) with Fuyang New Energy Technology (Nanyang) Limited (“Fuyang New Energy”). Under the Co-operation Framework Agreement, Fuyang will buy certain photovoltaic power station project companies (the “Target companies”, and each a “Target company”) developed by Suzhou GCL New Energy in 2017 and obtained construction directions of approximately 200Megawatt Peak. Suzhou GCL New Energy and Fuyang New Energy will enter into separate share purchase agreements and other agreements for each Target Company. Suzhou GCL New Energy will arrange the share transfer and co-operate with Fuyang New Energy for developing the Target Companies. The costs of the agreement are the paid share capital of the Target Company plus a premium of RMB 100,000, the engineering fess and compliance with applicable laws and regulations fees, etc. In all, the Target Companies will adopt the built-transfer model. Suzhou GCL New Energy will be responsible for the engineering, procurement and construction, and provide operation and maintenance services after completion of the Target Companies. This is part of the Company’s asset light model operational strategy. After the parties have entered into Co-operation Framework Agreement, they shall enter into the followings agreements:

Share Purchase Agreement

The Parties will enter into a share purchase agreement with respect to share transfer of each Target

Company (the “Share Purchase Agreement”). The total consideration shall be paid by Fuyang New Energy three days after the completion of the share transfer (the “Completion”). Fuyang New Energy will hold the shares of the Target Companies not more than five years. Pursuant to the Co-operation Framework Agreement, Suzhou GCL New Energy shall have the preferential rights (but not obligation) to repurchase shares of the Target Companies.

Loan Agreement

During the period between the date of the Share Purchase Agreement and the Completion, Fuyang New

Energy shall provide finance for the Target Companies’ pre-development approval fee, EPC fees and

project supervision fee (the “total Engineering Fees”). Suzhou GCL New Energy will provide a guarantee to secure the Target Companies’ obligations to Fuyang New Energy before the Completion.

Consulting Services Agreement

Suzhou GCL New Energy will provide to the Target Companies certain consulting services, including the handling of relevant filings and registrations with relevant authorities.

Share Pledge Agreement

Suzhou GCL New Energy will pledge 100% of the equity interest in the Target Companies to Fuyang New Energy to secure its obligations under the Share Purchase Agreement and the Loan Agreement.

Other agreements

The Parties will also enter into other agreements to facilitate the co-operation, including:

a maintenance agreement regarding operational maintenance services provided by Suzhou GCL New Energy for the photovoltaic project of the Target Companies after the Completion;

other agreements relating to the purchase of parts and modules for the projections of the Target Companies; agreements on payment of land related fees;

a share transfer agreement separately in accordance with the requirements of the relevant local authorities to effect the transfer of shares.

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