August 6 (Solar) – GCL-Poly Energy Holdings Ltd (HKG:3800) and Shanghai Electric Group Co Ltd (SHA:601727) have terminated an agreement under which the latter was to buy a 51% stake in a polysilicon subsidiary of GCL-Poly.
In June it was announced that Shanghai Electric would buy the majority stake in Jiangsu Zhongneng Polysilicon Technology Development Co Ltd. GCL-Poly Energy said at the time it was important to find a strategic partner after the Chinese government reduced support for new solar capacity.
On Friday, however, the two companies agreed to terminate the previously signed framework agreement and the transaction contemplated under it. GCL-Poly said it was difficult to reach a full agreement on the terms of the deal in a short timeframe because of the size and complexity of the transaction. Shanghai Electric and GCL-Poly have reached the conclusion that the timing and conditions for proceeding with the transaction “are not mature enough”.
The overall valuation of Zhongneng Polysilicon was not expected to exceed CNY 25 billion (USD 3.65bn/EUR 3.15bn), according to the June announcement.