FAST NEWS: GCL New Energy Plunges with 20% Discount on Share Placement
The latest: GCL New Energy Holdings Ltd. (0451.HK), a subsidiary of GCL Technology Holdings Ltd. (3800.HK), announced on Thursday that it will place 2,275 million shares on a top-up placement basis, representing approximately 9.74% of the enlarged issued share capital, to not less than six independent places. Upon completion of the transaction, GCL Technology’s shareholding will be diluted from 49.24% to 44.44%.
Looking up: The net proceeds from the placement will be HK$310 million ($39.8 million), of which 90% will be used to support the cost relating to the investment, research and development of natural gas, liquid natural gas and integrated energy project management business and to develop the O&M services for other energy sectors, and 10% will be used as general working capital.
Take Note: The price of GCL New Energy’s share placement is HK$0.138, a discount of 19.8% from the previous day’s closing price of HK$0.172, which means that the company needs to offer a substantial discount on the placement price in order to attract investors to participate.
Digging Deeper: GCL New Energy is a company that develops, constructs, operates and manages solar power plants. Its parent company, GCL Technology, is one of the world’s top manufacturers of polysilicon, a key component in the manufacture of solar panels, which are becoming increasingly competitive with traditional coal and natural gas-based power generation. However, GCL Technology defaulted a few years ago due to its heavy debt burden, but fortunately, the sharp rise in polysilicon prices helped the company rebound strongly and turn a loss into a profit of 5.08 billion yuan last year.
Market Reaction: GCL New Energy reached a low of HK$0.132 on Thursday, falling below the HK$0.138 allotment price, and closed at HK$0.137 at noon, a big drop of 20.3% and close to the low of the past 52 weeks. GCL Technology was 1.7% softer to HK$3.56.
Translation by Jony Ho
To subscribe to Bamboo Works free weekly newsletter, click here
Related Articles
BRIEF: ZTE’s profit sags in first quarter
BRIEF: Fosun Pharma raises stake in Henlius
RELATED ARTICLES
-
GCL Technology plunges into the red, eyes Middle East production
3800.HK -
BRIEF: Ubtech makes third post-IPO share placement at 20% discount
9880.HK
-
BRIEF: MicroPort MedBot raises $35 million in share placement at 20% discount
2252.HK
-
BRIEF: China Ruyi raises $500 million in share placement at slight discount
0136.HK
- Sigenergy charges into IPO just two years after inception
-
BRIEF: Robosense raises HK$270 million in share placement at 8% discount
2498.HK
-
BRIEF: Ubtech raises $113 million in fourth post-IPO share placement
9880.HK
