CIC buys 20% stake in solar operator
China Investment Corp said on Thursday it has bought a 20 per cent stake in GCL-Poly Energy, a Hong Kong-listed solar power plant operator, for HK$5.5bn (US$705m) as the sovereign wealth fund takes a bet on new energy.
As part of the investment, CIC and GCL-Poly plan to set up a joint-venture company to develop photovoltaic projects, which generate electricity by using solar cells to convert energy from the sun.
Zhu Gongshan, chairman and chief executive of GCL-Poly, said CIC’s investment “marks an important step for GCL-Poly” and would give it the financial flexibility to accelerate growth of its solar business.
CIC, which will become GCL’s second largest shareholder with a 20 per cent stake after the deal, has been on a buying spree in the last few months, snapping up minority stakes in resources and mining companies from Canada, Kazakhstan, Indonesia and Singapore.
It has also said it would was focused on investments in commodities-related assets and real estate as a hedge against inflation and currency depreciation.
Its latest investment represents a foray into China’s solar energy sector, where prices are falling despite growing demand because of overcapacity.
GCL-Poly earlier this year acquired Mr Zhu’s polysilicon business for US$3.4bn. Its shares, which have been suspended from trading since Monday, surged as much as 20 per cent to HK$2.77 on Thursday morning. They closed at HK$2.60 at midday.
