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GCL Technology Holdings Limited — Proxy Solicitation & Information Statement 2017
Dec 11, 2017
50888_rns_2017-12-11_7819e0e2-c433-4ce9-8d11-a3e45ebfb0d2.pdf
Proxy Solicitation & Information Statement
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THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.
If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, certified public accountant or other professional adviser.
If you have sold or transferred all your shares in GCL-Poly Energy Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.
GCL-POLY ENERGY HOLDINGS LIMITED 保利協鑫能源控股有限公司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 3800)
CONTINUING CONNECTED TRANSACTION IN RELATION TO WAFER PRODUCTS SUPPLY FRAMEWORK AGREEMENT
Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders
SOMERLEY CAPITAL LIMITED
Capitalised terms used on this cover page shall have the same meanings as those defined in the section headed “Definitions” in this circular.
A letter from the Board is set out on pages 4 to 14 of this circular and the letter from the Independent Board Committee is set out on pages 15 to 16 of this circular.
The letter of advice from Somerley containing its advice to the Independent Board Committee and the Independent Shareholders in relation to the Framework Agreement is set out on pages 17 to 27 of this circular.
A notice convening the EGM to be held at Centenary Room III, G/F., Marco Polo Hong Kong Hotel, 3 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong on Friday, 5 January 2018 at 10:00 a.m. is set out on pages 34 to 36 of this circular. Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM should you so wish.
12 December 2017
CONTENTS
| Page |
|---|
| Definitions................................................................................................................ 1 |
| Letter from the Board.............................................................................................. 4 |
| Letter from the Independent Board Committee...................................................... 15 |
| Letter from Somerley............................................................................................. 17 |
| Appendix — General Information................................................................. 28 |
| Notice of Extraordinary General Meeting.............................................................. 34 |
– i –
DEFINITIONS
In this circular, the following expressions have the meanings set out below unless the context requires otherwise:
- “Annual Cap”
the maximum aggregate annual value of the Wafer Products to be supplied by GCL-Poly Suzhou to the GCL System Integration Entities under the Framework Agreement during the Term, the details of which are set out in the section headed “Annual Cap” in this circular
-
“associate”
-
“Board”
-
has the meaning ascribed to it under the Listing Rules the board of Directors
-
“Company”
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GCL-Poly Energy Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Stock Exchange
-
“connected person”
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has the meaning ascribed to it under the Listing Rules
-
“Director(s)”
-
the director(s) of the Company
-
“EGM” an extraordinary general meeting of the Company to be convened for the Independent Shareholders to consider and, if thought fit, approve the Framework Agreement, the transactions contemplated thereunder and the Annual Cap
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“Framework Agreement” the agreement dated 21 November 2017 entered into between GCL-Poly Suzhou and the GCL System Integration Entities in relation to the supply and purchase of the Wafer Products
-
“GCL-Poly Suzhou”
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GCL-Poly (Suzhou) New Energy Co., Ltd.* (保利協鑫
-
（蘇州）新能源有限公司), a company established in the PRC and a wholly-owned subsidiary of the Company
-
“GCL System Integration” GCL System Integration Technology Co., Ltd.* (協鑫集 成科技股份有限公司), a company established in the PRC with its shares listed on the Small and Medium Enterprise Board of the Shenzhen Stock Exchange (stock code: 002506)
– 1 –
DEFINITIONS
-
“GCL System Integration GCL System Integration and GCL System Integration Entities” (Suzhou)
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“GCL System Integration GCL System Integration Technology (Suzhou) Ltd.* (協 (Suzhou)” 鑫集成科技（蘇州）有限公司), a company established in the PRC and a wholly-owned subsidiary of GCL System Integration
-
“Group” the Company and its subsidiaries
-
“HK$” Hong Kong dollar, the lawful currency of Hong Kong
-
“Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China
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“Independent Board a committee of the Board established for the purpose of Committee” advising the Independent Shareholders in respect of the Framework Agreement and the transactions contemplated thereunder, comprising all the independent non-executive Directors
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“Independent Financial Somerley Capital Limited, a corporation licensed to carry Adviser” or “Somerley” out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the Securities and Futures Ordinance, the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Framework Agreement, the transactions contemplated thereunder and the Annual Cap
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“Independent shareholders of the Company other than Mr. Zhu, Mr. Shareholders” Zhu Yufeng, Ms. Sun Wei and Mr. Yeung Man Chung, Charles and their respective associates
-
“Latest Practicable Date”
-
7 December 2017, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein
-
“Listing Rules”
-
the Rules Governing the Listing of Securities on the Stock Exchange
– 2 –
DEFINITIONS
| “Mr. Zhu” | Mr. Zhu Gongshan, the Chairman and an executive |
|---|---|
| Director | |
| “PRC” | The People’s Republic of China, for the purpose of |
| this circular, excludes Hong Kong, Macau Special | |
| Administrative Region and Taiwan | |
| “RMB” | Renminbi, the lawful currency of the PRC |
| “SFO” | Securities and Futures Ordinance (Cap. 571, Laws of |
| Hong Kong) | |
| “Share(s)” | ordinary shares of HK$0.10 each in the share capital of |
| the Company | |
| “Shareholder(s)” | the shareholders of the Company |
| “Stock Exchange” | The Stock Exchange of Hong Kong Limited |
| “Term” | the term of the Framework Agreement, being 1 January |
| 2018 to 31 December 2018 | |
| “Wafer Products” | wafer products, which include multicrystalline and |
| monocrystalline wafer products | |
| “Zhu Family Trust” | the discretionary trust known as the “Asia Pacific Energy |
| Fund”, of which Mr. Zhu and his family (including Mr. | |
| Zhu Yufeng, an executive Director and son of Mr. Zhu) | |
| are beneficiaries | |
| “%” | per cent. |
For illustration purposes only, this circular contains translations between Renminbi and Hong Kong dollar amounts at RMB1 = HK$1.177, being the exchange rate prevailing on 21 November 2017. The translations should not be taken as a representation that the Renminbi could actually be converted into Hong Kong dollars at that rate or at all.
- All of the English titles or names of the PRC entities, as well as certain items contained in this circular have been included for identification purpose only and may not necessarily be the official English translations of the corresponding Chinese titles or names. If there is any inconsistency between the English translations and the Chinese titles or names, the Chinese titles or names shall prevail.
– 3 –
LETTER FROM THE BOARD
GCL-POLY ENERGY HOLDINGS LIMITED 保利協鑫能源控股有限公司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 3800)
Executive Directors:
Mr. Zhu Gongshan (Chairman) Mr. Zhu Zhanjun (Chief Executive Officer) Mr. Ji Jun
Mr. Zhu Yufeng
Ms. Sun Wei Mr. Yeung Man Chung, Charles (Chief Financial Officer & Company Secretary)
Mr. Jiang Wenwu
Mr. Zheng Xiongjiu
Registered Office: Cricket Square, Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands
Principal place of business in Hong Kong: Units 1703B–1706, Level 17 International Commerce Centre 1 Austin Road West Kowloon, Hong Kong
Independent non-executive Directors:
Ir. Dr. Ho Chung Tai, Raymond
Mr. Yip Tai Him
Dr. Shen Wenzhong
Mr. Wong Man Chung, Francis
12 December 2017
To the Shareholders
Dear Sir or Madam,
CONTINUING CONNECTED TRANSACTIONS IN RELATION TO WAFER PRODUCTS SUPPLY FRAMEWORK AGREEMENT
INTRODUCTION
Reference is made to the announcement of the Company dated 21 November 2017 in relation to the Framework Agreement.
– 4 –
LETTER FROM THE BOARD
The purpose of this circular is to provide you with, among other things:
-
(i) further information in relation to the Framework Agreement, the transactions contemplated thereunder and the Annual Cap;
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(ii) the recommendations from the Independent Board Committee;
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(iii) the advice from Somerley to the Independent Board Committee and Independent Shareholders in relation to the Framework Agreement and the Annual Cap; and
-
(iv) the notice of the EGM.
THE FRAMEWORK AGREEMENT
Date
21 November 2017
Parties
-
(1) GCL-Poly Suzhou, as supplier; and
-
(2) GCL System Integration and GCL System Integration (Suzhou), as customers
Term
The term of the Framework Agreement is for the period of one year commencing from 1 January 2018 and ending on 31 December 2018.
Subject matter
GCL-Poly Suzhou has agreed to supply (by itself or through its affiliates), and the GCL System Integration Entities have agreed to purchase (by themselves or through their subsidiaries) the Wafer Products, being multicrystalline and monocrystalline wafers, during the Term.
The Framework Agreement serves as a framework agreement between the parties pursuant to which delivery notice for the Wafer Products containing quantity, price and specification may be agreed between GCL-Poly Suzhou (or its affiliates) and the GCL System Integration Entities (or their subsidiaries) during the Term. In the event of any conflict between the terms of the Framework Agreement and any delivery notice, the terms of the Framework Agreement shall prevail.
– 5 –
LETTER FROM THE BOARD
Purchase quantity
Under the Framework Agreement, and subject to the Annual Cap, the estimated total quantity of the Wafer Products to be supplied by GCL-Poly Suzhou (or its affiliates) during the Term is 650,000,000 pieces (the “ Estimated Purchase Quantity ”).
The actual volume of the Wafer Products to be supplied by GCL-Poly Suzhou from time to time shall be determined by both parties based on the delivery notices agreed between GCL-Poly Suzhou and the GCL System Integration Entities, subject to the following:
-
(i) the maximum monthly purchase quantity shall be 115% of 54,166,000 pieces;
-
(ii) the maximum total purchase quantity during the Term shall be 115% of the Estimated Purchase Quantity; and
-
(iii) the minimum total purchase quantity during the Term shall be 85% of the Estimated Purchase Quantity (the “ Minimum Purchase Quantity ”).
If the GCL System Integration Entities fail to purchase the Minimum Purchase Quantity on or before the end of the Term, i.e. 31 December 2018 (“ Year End Date ”) (other than due to the failure by GCL-Poly Suzhou to deliver the required Wafer Products), the GCL System Integration Entities shall within one month after the Year End Date (“ Buyer Grace Period ”) purchase such quantity of Wafer Products equals to the shortfall between the Minimum Purchase Quantity and the actual quantity purchased by the GCL System Integration Entities (“ Buyer Shortfall Quantity ”). The GCL System Integration Entities shall state in each delivery notice given during the Buyer Grace Period whether the purchase under such notice shall count towards reducing the Buyer Shortfall Quantity.
If the GCL System Integration Entities fail to reduce the Buyer Shortfall Quantity to zero during the Buyer Grace Period, the GCL System Integration Entities shall pay GCL-Poly Suzhou a default payment. Such default payment shall be an amount equals to 0.05% of the value (determined based on the average price of the Wafer Products supplied by GCL-Poly Suzhou during the Term (the “ Average Price ”)) of the Buyer Shortfall Quantity of Wafer Products as at the end of the Buyer Grace Period, multiplied by the number of days comprised in the Buyer Grace Period. Such default payment is subject to a cap of 10% of the total Average Price of the Buyer Shortfall Quantity.
– 6 –
LETTER FROM THE BOARD
If the GCL System Integration Entities have requested the required quantity of Wafer Products in its delivery notices to meet the Minimum Purchase Quantity but GCL-Poly Suzhou fails to deliver any of the requested Wafer Products, GCL-Poly Suzhou shall within one month after the Year End Date (“ Seller Grace Period ”) deliver such quantity of Wafer Products as equals to the shortfall between the Minimum Purchase Quantity and the actual quantity delivered to the GCL System Integration Entities (“ Seller Shortfall Quantity ”). GCL-Poly Suzhou shall state in each delivery notice given during the Seller Grace Period whether the delivery shall count towards reducing the Seller Shortfall Quantity.
If GCL-Poly Suzhou fails to reduce the Seller Shortfall Quantity to zero during the Seller Grace Period, GCL-Poly Suzhou shall pay the GCL System Integration Entities a default payment. Such default payment shall be an amount equal to 0.05% of the value (calculated based on the Average Price) of the Seller Shortfall Quantity of Wafer Products as at the end of the Seller Grace Period, multiplied by the number of days comprised in the Seller Grace Period. Such default payment is subject to a cap of 10% of the total Average Price of the Seller Shortfall Quantity.
Deposit
A deposit in the sum of RMB50,000,000 (the “ Deposit ”) has been paid by the GCL System Integration Entities to GCL-Poly Suzhou.
The Deposit may be offset against outstanding sums payable by the GCL System Integration Entities to GCL-Poly Suzhou for the purchase of the Wafer Products under the Framework Agreement in the sum of RMB25,000,000 for each month in November 2018 and December 2018, provided that an offset may only be made if the GCL System Integration Entities have performed all the terms under the Framework Agreement at the time of the offset.
Any offsetting of sums payable by the GCL System Integration Entities against the Deposit as aforesaid shall not affect the GCL System Integration Entities’ obligations to pay for the Wafer Products in accordance with the terms of the Framework Agreement. Please refer to the section headed “Consideration and basis of consideration” for further details in relation to the credit terms for supply of the Wafer Products under the Framework Agreement.
– 7 –
LETTER FROM THE BOARD
Conditions precedent
The effectiveness of the Framework Agreement shall be conditional upon satisfaction of the following conditions precedent:
-
the Framework Agreement and the transactions contemplated thereunder having been approved by the board of directors of each of the GCL System Integration Entities and the shareholders of each of the GCL System Integration Entities at their respective general meetings; and
-
the Framework Agreement and the transactions contemplated thereunder (including the Annual Cap) having been approved by the Board and the Independent Shareholders at the EGM.
As at the Latest Practicable Date, the Framework Agreement had been approved by the Board and the board of directors of each of the GCL System Integration Entities.
Consideration and basis of consideration
The parties will negotiate the price for the Wafer Products for each calendar month before the fifth day of the month. GCL-Poly Suzhou shall determine the price of the Wafer Products to be supplied by it to the GCL System Integration Entities pursuant to the Framework Agreement from time to time based on market price with reference to the prevailing market supply and demand for the Wafer Products and the prices charged by other wafer product suppliers at the relevant time. Such price shall be fair, reasonable and on normal commercial terms.
In the event that the parties are unable to agree on the price on the fifteenth day of the month then the price shall be determined based on the standard price of the same categories of products supplied by GCL-Poly Suzhou during that month to its large customers (the “ Third Party Price ”). If the GCL System Integration Entities disagree with the Third Party Price, then the parties shall jointly appoint an audit firm in Shanghai, the PRC for the purpose of ascertaining the price to be charged, which price shall be binding on GCL-Poly Suzhou and the GCL System Integration Entities.
Payment for each purchase of the Wafer Products shall be settled in arrears within 15 days after delivery of the products by way of bank remittance or bank draft which may be drawn within no more than 180 days.
– 8 –
LETTER FROM THE BOARD
In order to ensure that the price for the Wafer Products to be supplied is determined so that the transactions under the Framework Agreement are conducted on normal commercial terms, or on terms no less favourable than terms available to independent third parties, a committee, comprising the chief executive officer of the Company as the chairman and the respective heads of the wafer and polysilicon business sectors, will review and determine on a monthly basis the price of the Wafer Products taking into account the prevailing market supply and demand, and the prices charged by other wafer product suppliers.
Default and termination right
If the GCL System Integration Entities fail to take delivery of the Wafer Products in accordance with the agreed delivery notice for reasons other than the default of GCL-Poly Suzhou, then a daily default payment in the sum of 0.05% on the value of the Wafer Products which the GCL System Integration Entities had failed to take delivery shall be payable by the GCL System Integration Entities, which shall accrue from the tenth date of the agreed delivery date to the date on which the GCL System Integration Entities takes full delivery of the Wafer Products in question.
If any payment by the GCL System Integration Entities shall become overdue for 10 days or more, a daily overdue payment in the sum of 0.05% on the overdue amount shall be payable by the GCL System Integration Entities, which shall accrue from the date on which the overdue occurs until the settlement of the overdue amount. If any payment is overdue for more than 30 days, GCL-Poly Suzhou may at its sole discretion reduce its monthly delivery of the Wafer Products to no more than 10,000,000 pieces. If any payment is overdue for more than 60 days, GCL-Poly Suzhou may cancel all or part of any outstanding orders and/or terminate the Framework Agreement if the GCL System Integration Entities shall fail to satisfy the overdue amount within seven business days after the serving of a written notice from GCL-Poly Suzhou demanding for payment. In any event, GCL-Poly Suzhou is entitled to cease any delivery of Wafer Products should the GCL System Integration Entities default in payment or in breach any terms of the Framework Agreement.
If GCL-Poly Suzhou shall fail to deliver the Wafer Products in full pursuant to the delivery notice agreed between GCL-Poly Suzhou and the GCL System Integration Entities for 10 days or more, a daily default payment in the sum of 0.05% on the value of the Wafer Products in question shall be payable by GCL-Poly Suzhou, which shall accrue from the date on which the delay in delivery commences until the delivery of the relevant Wafer Products in full. If any delivery is overdue for more than 30 days, the GCL System Integration Entities may terminate the Framework Agreement,
– 9 –
LETTER FROM THE BOARD
if GCL-Poly Suzhou shall fail to deliver the relevant Wafer Products within seven business days after the serving of the written notice from the GCL System Integration Entities demanding for delivery.
Annual Cap
The Annual Cap for the supply of the Wafer Products by GCL-Poly Suzhou during the Term under the Framework Agreement is RMB3,588,000,000 (equivalent to approximately HK$4,223,000,000).
The Annual Cap was calculated after taking into account (i) the maximum quantity of the Wafer Products to be supplied by GCL-Poly Suzhou under the Framework Agreement which is 747.5 million pieces, being 115% of the Estimated Purchase Quantity; (ii) the historical transaction amount between GCL System Integration and its subsidiaries and GCL-Poly Suzhou for the Wafer Products set out below; and (iii) the estimated selling price per piece of approximately RMB4.8 per piece based on the average market price of the Wafer Products, the Group’s average selling price to its large customers and the expected stable trend of the selling price of Wafer Products during the term of the Framework Agreement.
The historical transaction amount between GCL System Integration and its subsidiaries and GCL-Poly Suzhou for the Wafer Products during the periods as stated below is as follows:
From 1 July 2016 to 31 December 2016
approximately RMB523,000,000
From 1 January 2017 to 30 November 2017 approximately RMB1,674,000,000
The Company will re-comply with the requirements under the Listing Rules including without limitation to the reporting, announcement and (if necessary) Independent Shareholders’ approval requirement if the Annual Cap is exceeded. Pursuant to the terms of the Framework Agreement, GCL-Poly Suzhou is entitled to cease the supply of any further Wafer Products without being considered to be in breach of the Framework Agreement if such supply of additional Wafer Products would cause the Annual Cap to be exceeded.
Reasons for and benefits of the Framework Agreement
The establishment of stable customer relationships is important to the development of the Group as a polysilicon and wafer manufacturer, particularly in the highly competitive market in which the Group operates. The manufacturing and sale of polysilicon and wafer products is a core business of the Group. The entering into of the Framework Agreement serves to secure customer order for the Company
– 10 –
LETTER FROM THE BOARD
in respect of the Wafer Products, which is consistent with the Company’s strategy to focus on its core integrated solar business. The sale of the Wafer Products under the Framework Agreement is expected to generate stable income for the Company.
The Directors (excluding the independent non-executive Directors whose views are set out in the letter from the Independent Board Committee on pages 15 to 16 of this circular) consider that the Framework Agreement and the Annual Cap are on normal commercial terms and entered into in the ordinary and usual course of business of the Company, are fair and reasonable and in the interests of the Company and the Shareholders as a whole.
INFORMATION ON THE PARTIES
Information on the Company
The Company is an investment company and its subsidiaries are principally engaged in the manufacturing of polysilicon and wafers for the solar industry as well as the development, management and operation of environmentally friendly power plants.
Information on GCL-Poly Suzhou
GCL-Poly Suzhou is a wholly-owned subsidiary of the Company. The principal activity of GCL-Poly Suzhou is the holding of a majority of the Group’s wafer production plants in the PRC and acting as a financing platform and selling products for the Group’s solar material business sector. The Group’s business primarily consists of the manufacturing and sale of polysilicon and wafer products and developing, owning and operation of solar farms.
Information on GCL System Integration
GCL System Integration is a company established in the PRC the shares of which are listed on the Small and Medium Enterprise Board of the Shenzhen Stock Exchange. The principal business of GCL System Integration is the research, development, manufacturing and distribution of solar system, including solar materials and solar modules.
Information on GCL System Integration (Suzhou)
GCL System Integration (Suzhou) is a company established in the PRC and a wholly-owned subsidiary of GCL System Integration. The principal business of GCL System Integration (Suzhou) is the new energy technology services.
– 11 –
LETTER FROM THE BOARD
LISTING RULES IMPLICATION
As at the date of the Framework Agreement, approximately 22.40% and 28.19% of the issued shares in GCL System Integration was held by the Zhu Family Trust and Mr. Zhu Yufeng, an executive Director and son of Mr. Zhu, respectively. GCL System Integration (Suzhou) is a wholly-owned subsidiary of GCL System Integration. As the GCL System Integration Entities are associates of Mr. Zhu and Mr. Zhu Yufeng, they are therefore connected persons of the Company. Accordingly, the transactions under the Framework Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.
As one or more of the applicable percentage ratios in respect of the Annual Cap are more than 5%, the Framework Agreement, the transactions contemplated thereunder and the Annual Cap are subject to the reporting and announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.
Mr. Zhu and Mr. Zhu Yufeng have material interests in the transactions contemplated under the Framework Agreement by virtue of their shareholding interest in the GCL System Integration Entities. Ms. Sun Wei is the Vice Chairman of Golden Concord Holdings Limited, a company controlled by Mr. Zhu. Mr. Yeung Man Chung, Charles is the Vice President of Golden Concord Group Limited, a company controlled by Zhu Family Trust. Therefore, Mr. Zhu, Mr. Zhu Yufeng, Ms. Sun Wei and Mr. Yeung Man Chung, Charles, have abstained from voting on the resolutions of the Board in respect of the approval of the Framework Agreement.
EGM
The EGM will be held at Centenary Room III, G/F., Marco Polo Hong Kong Hotel, 3 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong at 10:00 a.m. on Friday, 5 January 2018 to consider and, if thought fit, approve the Framework Agreement and the respective transactions contemplated thereunder, including the Annual Cap.
A notice convening the EGM is set out on pages 34 to 36 of this circular. Whether or not you are able to attend the meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting at the EGM if you so wish.
– 12 –
LETTER FROM THE BOARD
In accordance with the Listing Rules, the vote of the Independent Shareholders taken at the EGM to approve the Framework Agreement and the Annual Cap will be taken by poll. Any Shareholder with a material interest in Framework Agreement and their respective associates will abstain from voting at the EGM.
Mr. Zhu and Mr. Zhu Yufeng (who were deemed to have interest in 6,370,388,156 Shares, representing approximately 34.27% of the entire issued share capital of the Company as at the Latest Practicable Date), Ms. Sun Wei (who has interest in 5,723,000 Shares, representing approximately 0.03% of the entire issued Share capital of the Company as at the Latest Practicable Date) and their respective associates will abstain from voting at the EGM. The result of the vote will be announced after the EGM.
INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER
The Independent Board Committee, comprising all the independent non-executive Directors, has been formed to consider and advise the Independent Shareholders in respect of the fairness and reasonableness of the terms of the Framework Agreement and the transactions contemplated thereunder, including the Annual Cap. Your attention is drawn to the letter from the Independent Board Committee set out on pages 15 to 16 of this circular, which contains its recommendation to the Independent Shareholders as to the voting at the EGM.
Somerley has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the fairness and reasonableness of the terms of the Framework Agreement and the Annual Cap. Your attention is drawn to the letter from Somerley set out on pages 17 to 27 of this circular.
RECOMMENDATION
The Directors (excluding the independent non-executive Directors, whose views are set out in the letter from the Independent Board Committee on pages 15 to 16 of this circular) consider that the terms of the Framework Agreement, including the Annual Cap, are fair and reasonable, and are in the interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Independent Shareholders to vote in favour of the ordinary resolutions to be proposed at the EGM to approve the Framework Agreement and the Annual Cap.
– 13 –
LETTER FROM THE BOARD
ADDITIONAL INFORMATION
Your attention is also drawn to the additional information contained in the appendix to this circular.
By order of the Board GCL-Poly Energy Holdings Limited Mr. Zhu Gongshan Chairman
– 14 –
LETTER FROM THE INDEPENDENT BOARD COMMITTEE
GCL-POLY ENERGY HOLDINGS LIMITED 保利協鑫能源控股有限公司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 3800)
To the Independent Shareholders
12 December 2017
Dear Sir or Madam,
CONTINUING CONNECTED TRANSACTION IN RELATION TO WAFER PRODUCTS SUPPLY FRAMEWORK AGREEMENT
We refer to this circular dated 12 December 2017 issued by the Company to its Shareholders, of which this letter forms part. Unless the context otherwise requires, terms defined in this circular shall have the same meaning when used in this letter.
We have been appointed as the Independent Board Committee to advise the Independent Shareholders as to whether, in our opinion, the terms of the transactions contemplated under the Framework Agreement, including the Annual Cap, are fair and reasonable and in the interests of the Company and the Shareholders as a whole.
Somerley has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders on the fairness and reasonableness of the terms of the Framework Agreement and the Annual Cap.
We wish to draw your attention to (i) the letter of advice from Somerley as set out on pages 17 to 27 of this circular; and (ii) the letter from the Board as set out on pages 4 to 14 of this circular, which set out information relating to, and the reasons for and benefits of the Framework Agreement and the respective transactions contemplated thereunder.
– 15 –
LETTER FROM THE INDEPENDENT BOARD COMMITTEE
As the Company’s independent non-executive Directors, we have discussed with the management of the Company the reasons for and benefits of the Framework Agreement, and the basis upon which their terms have been determined. We have considered the factors and reasons considered by, and the opinion and recommendation of Somerley as set out on pages 17 to 27 of this circular, respectively.
We are of the opinion that (i) the entering into the transactions contemplated under the Framework Agreement is in the ordinary and usual course of business of the Group and in the interests of the Company and the Shareholders as a whole; and (ii) the terms of the transactions contemplated under the Framework Agreement, including the Annual Cap, are on normal commercial terms and fair and reasonable, so far as the Independent Shareholders are concerned. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolutions to approve the transactions contemplated under the Framework Agreement, and Annual Cap, to be proposed at the EGM.
Yours faithfully, For and on behalf of the Independent Board Committee Ho Chung Tai, Yip Tai Him Shen Wenzhong Wong Man Chung, Raymond Francis
Independent non-executive Directors
– 16 –
LETTER FROM SOMERLEY
The following is the full text of the letter of advice from Somerley to the Independent Board Committee and the Independent Shareholders in relation to the Framework Agreement prepared for the purpose of inclusion in this circular.
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SOMERLEY CAPITAL LIMITED
20th Floor China Building 29 Queen’s Road Central Hong Kong
12 December 2017
- To: the Independent Board Committee and the Independent Shareholders of GCL-Poly Energy Holdings Limited
Dear Sirs,
CONTINUING CONNECTED TRANSACTION IN RELATION TO WAFER PRODUCTS SUPPLY FRAMEWORK AGREEMENT
INTRODUCTION
We refer to our appointment to advise the Independent Board Committee and the Independent Shareholders in respect of the supply of the Wafer Products by GCL-Poly Suzhou, a wholly-owned subsidiary of the Company, to the GCL System Integration Entities pursuant to the Framework Agreement (the “ Continuing Connected Transaction ”) (including the Annual Cap for the year ending 31 December 2018). Details of the Continuing Connected Transaction (including the Annual Cap) are set out in the letter from the Board contained in the circular of the Company to the Shareholders dated 12 December 2017 (the “ Circular ”), of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as those defined in the Circular unless the context requires otherwise.
As stated in the letter from the Board in the Circular, the Company announced on 21 November 2017 that the Framework Agreement was entered into between GCLPoly Suzhou and the GCL System Integration Entities, pursuant to which GCL-Poly Suzhou (or its affiliates) agreed to supply the Wafer Products, being multicrystalline and monocrystalline wafer products, to the GCL System Integration Entities (or their respective subsidiaries).
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LETTER FROM SOMERLEY
As at the date of the Framework Agreement, approximately 22.40% and 28.19% of the issued shares in GCL System Integration was held by the Zhu Family Trust and Mr. Zhu Yufeng, an executive Director and son of Mr. Zhu respectively. GCL System Integration (Suzhou) is a wholly-owned subsidiary of GCL System Integration. As the GCL System Integration Entities are associates of Mr. Zhu and Mr. Zhu Yufeng, each of the GCL System Integration Entities is therefore a connected person of the Company. Accordingly, the transactions contemplated under the Framework Agreement constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules.
As one or more the applicable percentage ratios calculated by reference to the Annual Cap are more than 5%, the transactions contemplated under the Framework Agreement constitute non-exempt continuing connected transaction for the Company under Chapter 14A of the Listing Rules and are subject to the reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.
The Independent Board Committee, comprising all of the independent nonexecutive Directors, namely Ir. Dr. Ho Chung Tai, Raymond, Mr. Yip Tai Him, Dr. Shen Wenzhong and Mr. Wong Man Chung, Francis, has been formed to advise and make recommendation to the Independent Shareholders on the Continuing Connected Transaction (including the Annual Cap). We, Somerley Capital Limited, have been appointed to advise the Independent Board Committee and the Independent Shareholders in the same regard.
We are not associated with the Company, GCL-Poly Suzhou and the GCL System Integration Entities or their respective core connected persons, close associates or associates (all as defined in the Listing Rules) and accordingly are considered to be eligible to give independent advice on the Continuing Connected Transaction (including the Annual Cap). Apart from normal professional fees payable to us in connection with this or similar appointments, no arrangement exists whereby we will receive any fees or benefits from the Company, GCL-Poly Suzhou and the GCL System Integration Entities or their respective core connected persons, close associates or associates.
In formulating our opinion, we have reviewed, amongst other things, the announcement of the Company dated 21 November 2017 in relation to the Framework Agreement, the Framework Agreement, the calculations of the Annual Cap together with the relevant supporting documents, the annual report of the Company for the year ended 31 December 2016 (the “ 2016 Annual Report ”), the interim report of the Company for the six months ended 30 June 2017 (the “ 2017
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LETTER FROM SOMERLEY
Interim Report ”) and the information contained in the Circular. We have also discussed with and reviewed information provided by management of the Group regarding the businesses of the Group and the prospects of conducting the Continuing Connected Transaction.
We have relied on the information and facts supplied, and the opinions expressed to us, by the Directors and management of the Group and have assumed that the information and facts provided and opinions expressed to us are true, accurate and complete in all material aspects at the time they were made. We have also sought and received confirmation from the Directors that no material facts have been omitted from the information supplied and opinions expressed to us. We have relied on such information and consider that the information we have received to be sufficient for us to reach an informed view and have no reason to believe that any material information has been withheld, nor doubt the truth or accuracy of the information provided. We have not, however, conducted any independent investigation into the business and affairs of the Group, nor have we carried out any independent verification of the information supplied.
PRINCIPAL FACTORS AND REASONS CONSIDERED
In arriving at our recommendation with regard to the Continuing Connected Transaction (including the Annual Cap), we have taken into account the principal factors and reasons set out below.
1. Information on the Group
The Group is principally engaged in the manufacturing of polysilicon and wafers for the solar industry as well as the development, owning and operation of solar farms.
As set out in the 2016 Annual Report and the 2017 Interim Report, the Group is the world’s leading polysilicon producer, the largest wafer supplier globally and a leading green energy enterprise in China. The Group’s polysilicon annual production capacity remained at 70,000 metric tonnes as at 30 June 2017. The Group’s wafer production capacity has increased to 20 gigawatts (“ GW ”) as at 30 June 2017. The Group mainly through GCL New Energy Holdings Limited, a listed subsidiary of the Company, operates solar generation projects with total installed capacity of approximately 5.1 GW.
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LETTER FROM SOMERLEY
2. Information on the parties
GCL-Poly Suzhou is a wholly-owned subsidiary of the Company. The principal activity of GCL-Poly Suzhou is the holding of a majority of the Group’s wafer production plants in the PRC and acting as a financing platform and selling products for the Group’s solar material business sector.
GCL System Integration is a company established in the PRC the shares of which are listed on the Small and Medium Enterprise Board of the Shenzhen Stock Exchange. The principal business of GCL System Integration is the research, development, manufacturing and distribution of solar systems, including solar materials and solar modules.
GCL System Integration (Suzhou) is a company established in the PRC and a wholly-owned subsidiary of GCL System Integration. The principal business of GCL System Integration (Suzhou) is the new energy technology services.
3. Reasons for and benefits of the entering into the Continuing Connected Transaction
As set out in the letter from the Board in the Circular, the establishment of stable customer relationships is important to the development of the Group as a polysilicon and wafer manufacturer, particularly in the highly competitive market in which the Group operates. The manufacturing and sale of polysilicon and wafer products is a core business of the Group. The entering into of the Framework Agreement serves to secure customer order for the Company in respect of the Wafer Products, which is consistent with the Company’s strategy to focus on its core integrated solar business. The sale of the Wafer Products under the Framework Agreement is expected to generate stable income for the Company.
Having regard to the principal business and operations of the Group and the reasons for and benefits of the entering into the Continuing Connected Transaction above, we concur with the aforesaid Directors’ view that the entering into the Continuing Connected Transaction is in the ordinary and usual course of the business of the Group.
4. Principal terms of the Framework Agreement
On 21 November 2017, GCL-Poly Suzhou and the GCL System Integration Entities entered into the Framework Agreement, the details of which are set out below.
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LETTER FROM SOMERLEY
Parties
-
(1) GCL-Poly Suzhou, as supplier
-
(2) GCL System Integration and GCL System Integration (Suzhou), as customers
Term
The term of the Framework Agreement is for the period of one year commencing from 1 January 2018 and ending on 31 December 2018.
Subject matter
GCL-Poly Suzhou has agreed to supply (by itself or through its affiliates), and the GCL System Integration Entities have agreed to purchase (by themselves or through their subsidiaries) the Wafer Products, being multicrystalline and monocrystalline wafers, during the Term.
The Framework Agreement serves as a framework agreement between the parties pursuant to which delivery notice for the Wafer Products containing quantity, price and specification may be agreed between GCLPoly Suzhou (or its affiliates) and the GCL System Integration Entities (or their subsidiaries) during the Term. In the event of conflict between the terms of the Framework Agreement and any delivery notice, the terms of the Framework Agreement shall prevail.
Purchase quantity
Under the Framework Agreement, and subject to the Annual Cap, the estimated total quantity of the Wafer Products to be supplied by GCLPoly Suzhou (or its affiliates) during the Term is 650.0 million pieces (the “ Estimated Purchase Quantity ”).
The actual volume of the Wafer Products to be supplied by GCL-Poly Suzhou from time to time shall be determined by both parties based on the delivery notices agreed between GCL-Poly Suzhou and the GCL System Integration Entities, subject to the following:
- (i) the maximum monthly purchase quantity shall be 115% of 54,166,000 pieces;
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LETTER FROM SOMERLEY
-
(ii) the maximum total purchase quantity during the Term shall be 115% of the Estimated Purchase Quantity; and
-
(iii) the minimum total purchase quantity during the Term shall be 85% of the Estimated Purchase Quantity (the “ Minimum Purchase Quantity ”).
If the GCL System Integration Entities fail to purchase the Minimum Purchase Quantity or GCL-Poly Suzhou fails to deliver the Wafer Products that meets the Minimum Purchase Quantity on or before the end of the Term, i.e. 31 December 2018 (“ Year End Date ”), the defaulting party shall pay the non-defaulting party a daily default payment in an amount equals to 0.05% of the value (determined based on the average price of the Wafer Products supplied by GCL-Poly Suzhou during the Term (the “ Average Price ”)) of the shortfall quantity of the Wafer Products, subject to a cap of 10% of the total Average Price of the shortfall quantity.
Deposit
A deposit in the sum of RMB50.0 million (the “ Deposit ”) has been paid by the GCL System Integration Entities to GCL-Poly Suzhou. The Deposit may be offset against outstanding sums payable by the GCL System Integration Entities to GCL-Poly Suzhou for the purchase of the Wafer Products under the Framework Agreement in the sum of RMB25.0 million for each month in November 2018 and December 2018.
Conditions precedent
The effectiveness of the Framework Agreement shall be conditional upon satisfaction of the following conditions precedent:
-
the Framework Agreement and the transactions contemplated thereunder having been approved by the board of directors of the GCL System Integration Entities and the shareholders of each of the GCL System Integration Entities at their respective general meetings; and
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the Framework Agreement and the transactions contemplated thereunder (including the Annual Cap) having been approved by the Board and the Independent Shareholders at the EGM.
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LETTER FROM SOMERLEY
As at the Latest Practicable Date, the Framework Agreement had been approved by the Board and the board of directors of the GCL System Integration Entities.
Consideration and basis of consideration
The parties will negotiate the price for the Wafer Products for each calendar month before the fifth day of the month. GCL-Poly Suzhou shall determine the price of the Wafer Products to be supplied by it to the GCL System Integration Entities pursuant to the Framework Agreement from time to time based on the market price with reference to the prevailing market supply and demand for the Wafer Products and the prices charged by other wafer product suppliers at the relevant time. Such price shall be fair, reasonable and on normal commercial terms.
In the event that the parties are unable to agree on the price on the fifteenth day of the month then the price shall be determined based on the standard price of the same categories of products supplied by GCL-Poly Suzhou during that month to its large customers (the “ Third Party Price ”). If the GCL System Integration Entities disagree with the Third Party Price, then the parties shall jointly appoint an audit firm in Shanghai, the PRC for the purpose of ascertaining the price to be charged, which price shall be binding on GCL-Poly Suzhou and the GCL System Integration Entities.
Payment for each purchase of the Wafer Products shall be settled in arrears within 15 days after delivery of the products by way of bank remittance or bank draft which may be drawn within no more than 180 days.
In order to ensure that the price for the Wafer Products to be supplied is determined so that the transactions under the Framework Agreement are conducted on normal commercial terms, or on terms no less favourable than terms available to independent third parties, a committee, comprising the chief executive officer of the Company as the chairman and the respective heads of the wafer and polysilicon business sectors, will review and determine on a monthly basis the price of the Wafer Products taking into account the prevailing market supply and demand, and the prices charged by other wafer product suppliers.
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LETTER FROM SOMERLEY
Other terms
Further details of the principal terms of the Framework Agreement, including default and termination right, are set out in the letter from the Board in the Circular.
We have reviewed and compared the principal terms of the Framework Agreement with other long-term (from around one year to three years) supply agreements entered into between the Group and a number of independent third party customers (the “ Independent Customers ”) in recent years in connection with the supply of the Wafer Products by the Group to these third party customers (the “ Independent Customers Supply Agreements ”). The Independent Customers were among the largest customers of the Group for 2017 and the quantity of the Wafer Products to be purchased by them pursuant to the Independent Customers Supply Agreements are generally comparable to that of the Framework Agreement. Based on our review, we note that the pricing and other terms to the Group set out in the Framework Agreement, in overall, are no less favourable than those of the Independent Customers Supply Agreements.
5. The Annual Cap
The Annual Cap for the supply of the Wafer Products by GCL-Poly Suzhou during the Term under the Framework Agreement is RMB3,588.0 million (equivalent to approximately HK$4,223.0 million).
As stated in the letter from the Board in the Circular, the Annual Cap was calculated after taking into account (i) the maximum quantity of the Wafer Products to be supplied by GCL-Poly Suzhou under the Framework Agreement which is 747.5 million pieces, being 115% of the Estimated Purchase Quantity; (ii) the historical transaction amount between GCL System Integration and its subsidiaries and GCL-Poly Suzhou for the Wafer Products during the period from (A) 1 January 2017 to 30 November 2017, being approximately RMB1,674 million; and (B) 1 July 2016 to 31 December 2016, being approximately RMB523 million; and (iii) the estimated selling price per piece of approximately RMB4.8 per piece based on the average market price of the Wafer Products, the Group’s average selling price to its large customers and the expected stable trend of the selling price of Wafer Products during the Term.
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LETTER FROM SOMERLEY
In order to assess the fairness and reasonableness of the Annual Cap, we have reviewed by way of the followings:
(i) The estimated maximum quantity of the Wafer Products to be supplied by GCL-Poly Suzhou under the Framework Agreement
As advised by the management of the Group, the maximum quantity of the Wafer Products to be supplied by GCL-Poly Suzhou is estimated to be 747.5 million pieces for the purpose of determination of the Annual Cap.
According to the Framework Agreement, the maximum total purchase quantity (the “ Maximum Purchase Quantity ”) by the GCL System Integration Entities during the Term shall be 747.5 million pieces, being 115% of the Estimated Purchase Quantity of 650.0 million pieces. As discussed with the management of the Company, the Estimated Purchase Quantity was determined after arm’s length negotiations between the GCLPoly Suzhou and the GCL System Integration Entities taking into account the GCL System Integration Entities’ demand for, and the capacity of GCL-Poly Suzhou in producing, the Wafer Products. We have obtained the projected capacity of the Wafer Products of the Group and noted that the Group is able to fulfil the Maximum Purchase Quantity without interrupting the existing production schedule. The management’s estimate is therefore in line with the Maximum Purchase Quantity pursuant to the Framework Agreement.
(ii) The estimated selling price of the Wafer Products
As advised by the management of the Group, the average price of each piece of the Wafer Products to be supplied by GCL-Poly Suzhou to the GCL System Integration Entities is estimated to be not more than RMB4.8 (inclusive of tax) during the Term for the purpose of determination of the Annual Cap.
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LETTER FROM SOMERLEY
Based on our review of the selling price of the Wafer Products sold by the Group to its top five customers (other than GCL System Integration and its subsidiaries) during the first ten months of 2017, we noted that the average selling price per piece (inclusive of tax) was close to approximately RMB4.8. Also, we have reviewed the pricing information of the Wafer Products as quoted on PVinsights[1] , we noted that the average market price of the Wafer Products (mainly multicrystalline wafers) during the first ten months in 2017 was approximately RMB4.8 (adjusted to include tax). Accordingly, the recent selling prices of the Wafer Products were close to the management’s estimate of RMB4.8.
We have further reviewed the selling price of the Wafer Products sold by the Group to its customers on a quarterly basis from 2014 to the third quarter of 2017 and general market price of the Wafer Products as quoted on PVinsights from 2014 to 2017. During our review, we noted that the selling price of the Wafer Products exhibited a general downward trend in the last few years until the beginning of 2017 when the general market price of the Wafer Products has appeared to have stabilised and mostly fluctuated between the range of approximately RMB4.6 to approximately RMB5.0 with an average selling price of approximately RMB4.8. Moreover, we have also noted that the average selling price of the Wafer Products sold by the Group exhibited a similar pattern and level.
In light of the above, we consider it reasonable that the average price of each piece of the Wafer Products to be supplied by GCL-Poly Suzhou to the GCL System Integration Entities, for the purpose of determination of the Annual Cap, is estimated to be RMB4.8 (inclusive of tax) during the entire Term, as the estimate is in line with the average market selling price of the Wafer Products.
1 PVinsights is a premier international solar photovoltaic (“ PV ”) research firm that helps leading solar PV companies and financial professionals making real time decisions on business strategy, component procurements and investments by the provision of consultancy or efficient price reports and advisory service. We further noted that PVinsights is widely quoted in PV industry publications and online media sources on the subject of PV.
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LETTER FROM SOMERLEY
OPINION AND RECOMMENDATION
Having taken into account the above principal factors and reasons, we consider that (i) the entering into the Continuing Connected Transaction is in the ordinary and usual course of business of the Group and in the interests of the Company and the Shareholders as a whole; and (ii) the terms of the Continuing Connected Transaction (including the Annual Cap) are on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, we recommend the Independent Board Committee to recommend, and we ourselves recommend, the Independent Shareholders to vote in favor of the ordinary resolutions to be proposed at the EGM in relation to the Continuing Connected Transaction (including the Annual Cap).
Yours faithfully, for and on behalf of SOMERLEY CAPITAL LIMITED Danny Cheng Director
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GENERAL INFORMATION
APPENDIX
1. RESPONSIBILITY STATEMENT
This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.
2. DISCLOSURE OF INTERESTS
(a) Directors’ and chief executives’ interests and short positions in shares and underlying shares of the Company and its associated corporations
As at the Latest Practicable Date, the interests and short positions of the Directors and the chief executive of the Company in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required (i) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Listing Rules, were as follows:
Long position in the Shares:
| Number | of Shares held | Approximate | ||||
|---|---|---|---|---|---|---|
| Number of | percentage of | |||||
| Name of Director/ | Beneficiary | Corporate | Personal | underlying | issued share | |
| chief executive | of a trust | interests | interests | Shares held | Total | capital |
| Zhu Gongshan | 6,197,054,822 | — | — | 173,333,334 | 6,370,388,156 | 34.27% |
| (note 1) | (note 1) | |||||
| Zhu Zhanjun | — | — | 3,400,000 | 2,719,359 | 6,119,359 | 0.03% |
| (note 2) | ||||||
| Ji Jun | — | — | — | 2,215,774 | 2,215,774 | 0.01% |
| (note 2) | ||||||
| Zhu Yufeng | 6,197,054,822 | — | — | 175,851,259 | 6,372,906,081 | 34.28% |
| (note 1) | (note 3) |
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GENERAL INFORMATION
APPENDIX
| Name of Director/ chief executive Sun Wei Yeung Man Chung, Charles Jiang Wenwu Zheng Xiongjiu Ho Chung Tai, Raymond Yip Tai Him |
Number of Shares held Approximate percentage of issued share capital Beneficiary of a trust Corporate interests Personal interests Number of underlying Shares held Total — — 5,723,000 3,222,944 (note 2) 8,945,944 0.05% — — — 1,700,000 (note 2) 1,700,000 0.01% — — 9,600,000 1,712,189 (note 2) 11,312,189 0.06% — — 250,000 2,517,924 (note 2) 2,767,924 0.01% — — — 1,007,170 (note 2) 1,007,170 0.01% — — — 1,007,170 (note 2) 1,007,170 0.01% |
|---|---|
Notes:
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(1) An aggregate of 6,197,054,822 Shares are collectively held by Highexcel Investments Limited, Happy Genius Holdings Limited and Get Famous Investments Limited, which are wholly-owned by Golden Concord Group Limited, which in turn is whollyowned by Asia Pacific Energy Holdings Limited. Asia Pacific Energy Holdings Limited is in turn wholly-owned by Asia Pacific Energy Fund Limited. Asia Pacific Energy Fund Limited is ultimately held under a discretionary trust with Credit Suisse Trust Limited as trustee for Mr. Zhu and his family (including Mr. Zhu Yufeng, a Director and the son of Mr. Zhu) as beneficiaries. Happy Genius Holdings Limited had lent 312,000,000 shares of the Company to the convertible bond investor’s associate under the shares lending agreement dated 23 November 2013 (as amended by an agreement dated 15 July 2015 and further amended by an agreement dated 25 January 2016), out of which 69,333,333 shares were returned on 29 April 2016 and 69,333,333 shares were returned on 7 April 2017. Happy Genius Holdings Limited was thus also interested in a long position of 173,333,334 Shares.
-
(2) These are share options granted by the Company to the Directors, pursuant to the share option scheme adopted by the shareholders of the Company on 22 October 2007. Such granted share options can be exercised by the Directors at various intervals during the period from 1 April 2009 to 28 March 2026 at an exercise price of HK$1.324, HK$1.160 or HK$0.586.
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(3) The 175,851,259 underlying shares comprises the long position of 173,333,334 Shares held by Happy Genius Holdings Limited under Note (1) and 2,517,925 share options mentioned under Note (2) above.
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GENERAL INFORMATION
APPENDIX
Long position in the shares of the Company’s associated corporation, namely GCL New Energy Holdings Limited (“ GCL New Energy ”), in which the Company indirectly holds approximately 62.28% issued shares:
| Name of Director/ chief executive Zhu Yufeng Sun Wei Yeung Man Chung, Charles Zheng Xiongjiu |
Number of shares of GCL New Energy held Approximate percentage of issued share capital of GCL New Energy Beneficiary of a trust Corporate interests Personal interests Number of underlying Shares held Total — — — 3,523,100 3,523,100 0.02% — — — 27,178,200 27,178,200 0.14% — — — 15,099,000 15,099,000 0.08% — — 2,450,000 — 2,450,000 0.01% |
|---|---|
Note: These are share options granted by the Company’s subsidiary, namely GCL New Energy Holdings Limited. Such granted share options can be exercised by Mr. Zhu Yufeng at the interval between 24 July 2015 and 23 July 2025 at an exercise price at HK$0.606 per share, and by Ms. Sun Wei and Mr. Yeung Man Chung, Charles at the interval between 24 November 2014 and 23 July 2025 at an exercise price of HK$1.1798 or HK$0.606 per share.
Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor the chief executive of the Company had or was deemed to have any interests and short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required (i) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Listing Rules.
(b) Other disclosures under the SFO
Mr. Zhu and Mr. Zhu Yufeng are members of the Zhu Family Trust which is a controlling shareholder of the Company. Mr. Yeung Man Chung, Charles is the Vice President of Golden Concord Group Limited, a company controlled by Zhu Family Trust. Save as disclosed above, as at the Latest Practicable Date, none of the Directors was a director or employee of a company which had, or
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GENERAL INFORMATION
APPENDIX
was deemed to have, an interest or short position in the Shares or underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO.
3. DIRECTORS’ SERVICE CONTRACTS
As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with the Company or any member of the Group which is not determinable within one year without payment of compensation other than statutory compensation.
4. DIRECTORS’ INTERESTS IN ASSETS OR CONTRACTS AND OTHER INTERESTS
Save for (i) the transactions contemplated hereunder; (ii) the entering into of the New Coal Purchase Framework Agreement and the Wafer Products Supply Framework Agreement between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd (江蘇中能硅業科技發展有限公司)(“ Jiangsu Zhongneng ”) and Suzhou GCL Energy Technology Co., Ltd. (蘇州協鑫能源科技有限公司), and between GCL-Poly Suzhou and GCL System Integration, respectively, as disclosed in the announcement of the Company dated 6 January 2017; (iii) the entering into of the joint venture agreement between Suzhou GCL New Energy Development Company Limited (蘇州協鑫新能源發展有限公司) and GCL System Integration (Suzhou) to develop, design, produce and construct photovoltaic power station opportunities sourced by GCL System Integration (Suzhou) as disclosed in the joint announcement of the Company dated 3 March 2017; (iv) the entering into of (a) the New JZ Steam Supply Agreement and the New GCL Steam Supply Agreement by Jiangsu Zhongneng and Jiangsu GCL Silicon Material Technology Development Co., Ltd (江蘇協鑫硅材料科技發展有限公司), respectively with Xuzhou Jinshanqiao Cogeneration Co., Ltd (徐州金山橋熱電有限公司) (“ Xuzhou Jinshanqiao ”), (b) the New Yangzhou Steam Supply Agreement by Yangzhou Harbour Sludge Power Co., Ltd (揚州港口污泥發電有限公司) with Yangzhou GCL Photovoltaic Technology Co., Ltd (揚州協鑫光伏科技有限公司), (c) the Taicang Steam Supply Agreement by Taicang GCL Power Generation Co., Ltd (太倉港協鑫發電有限公司) with Taicang GCL Photovoltaic Technology Co., Ltd (太倉協鑫光伏科技有限公司), (d) the JX Steam Supply Agreement by Xuzhou Jinshanqiao with Jiangsu Xinhua Semiconductor Material Technology Limited (江蘇鑫華半導體材料科技有限公司), and (e) the New Desalted Water Supply Agreement by Xuzhou Jinshanqiao with Jiangsu Zhongneng, allw as disclosed in the announcement of the Company dated 30 June 2017; and (v) the entering into the GCL Intelligent Energy Lease Agreement and the Jiangsu Jiarun Lease Agreement between Suzhou GCL Industrial Applications Research Co., Ltd.*
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GENERAL INFORMATION
APPENDIX
(蘇州協鑫工業應用研究院有限公司) (“ Suzhou GCL Research ”) and GCL Intelligent Energy Co., Ltd. (協鑫智慧能源股份有限公司), and between Suzhou GCL Research and Jiangsu Jiarun Property Co., Ltd. (江蘇嘉潤置業有限公司), respectively, as disclosed in the announcement of the Company dated 29 September 2017, as at the Latest Practicable Date, none of the Directors or proposed Directors had, or has had, any direct or indirect interest in any assets which have been acquired, disposed of by or leased to, or which are proposed to be acquired, disposed of by or leased to, any member of the Group since 31 December 2016, being the date to which the latest published and audited consolidated financial statements of the Company were made up.
Save for the transactions contemplated hereunder and transactions which were disclosed pursuant to the Listing Rules, there was no contract or arrangement entered into by any member of the Group subsisting at the Latest Practicable Date of which any Director is materially interested and which is significant in relation to the business of the Group.
5. DIRECTORS’ INTERESTS IN COMPETING BUSINESS
As at the Latest Practicable Date, save as disclosed below, so far as the Directors were aware, none of the Directors or their respective associates had interest in any business which competed or was likely to compete, either directly or indirectly, with the business of the Group.
| Name of company | Principal activities | ||
|---|---|---|---|
| in which the relevant | of the competing | Percentage interest in | |
| Name of Director | Director has interest | company | competing company |
| Mr. Zhu Yufeng | 錫林郭勒中能硅業 | Ingot Plant in the | Mr. Zhu Yufeng, |
| 有限公司Xilingol | development and | through | |
| Zhongneng | construction stage | companies | |
| Silicon Co., Ltd.* | controlled by him, | ||
| (Dormant and | holds 70% interest | ||
| inactive) |
6. MATERIAL ADVERSE CHANGE
As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial position or trading position of the Group since 31 December 2016, being the date to which the latest published and audited financial statements of the Group were made up.
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GENERAL INFORMATION
APPENDIX
7. EXPERT AND CONSENT
The following expert has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name in the form and context in which it appears:
Name
Qualification
Somerley A licensed corporation under the SFO to carry out Type 1 and Type 6 regulated activity
As at the Latest Practicable Date, the above expert did not have any shareholding in any member of the Group nor did they have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.
As at the Latest Practicable Date, the above expert did not have any interest, direct or indirect, in any assets which have been since 31 December 2016 (being the date to which the latest published audited consolidated accounts of the Group were made up) acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.
8. GENERAL
The English text of this circular prevails over its Chinese translation in case of discrepancy.
9. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents will be available for inspection at Unit 1703B1706, Level 17, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong during normal business hours on any weekday (except public holidays) from the date of this circular up to and including 4 January 2018:
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(a) the Framework Agreement;
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(b) the letter from the Independent Board Committee, the text of which is set out on pages 15 to 16 of this circular;
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(c) the letter from Somerley, the text of which is set out on pages 17 to 27 of this circular; and
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(d) the written consent referred to under the section headed “Expert and Consent” in this Appendix.
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NOTICE OF EXTRAORDINARY GENERAL MEETING
GCL-POLY ENERGY HOLDINGS LIMITED 保利協鑫能源控股有限公司 (Incorporated in the Cayman Islands with limited liability)
(Stock Code: 3800)
NOTICE OF EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT an extraordinary general meeting (the “ EGM ”) of GCL-Poly Energy Holdings Limited (the “ Company ”) will be held at Centenary Room III, G/F., Marco Polo Hong Kong Hotel, 3 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong on Friday, 5 January 2018 at 10:00 a.m. for the purpose of considering and, if thought fit, passing with or without modification the following ordinary resolutions of the Company:
ORDINARY RESOLUTIONS
“ THAT
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(a) the wafer products supply framework agreement (the “ Framework Agreement ”) dated 21 November 2017 entered into between GCL-Poly (Suzhou) New Energy Co., Ltd. (保利協鑫（蘇州）新能源有限公司) as supplier and GCL System Integration Technology Co., Ltd. (協鑫集成科 技股份有限公司) and GCL System Integration Technology (Suzhou) Ltd.* (協鑫集成科技（蘇州）有限公司) as customers in relation to the supply of wafer products, a copy of which has been tabled before the meeting and initiated by the chairman of the meeting for identification purpose, and the transactions contemplated thereunder and the execution of which be and are hereby approved, ratified and confirmed;
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(b) the annual cap for the maximum aggregate value for the transactions under the Framework Agreement for the period from 1 January 2018 to 31 December 2018 be and are hereby approved, ratified and confirmed; and
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NOTICE OF EXTRAORDINARY GENERAL MEETING
- (c) any one of the directors of the Company be and is hereby authorised to do all such acts and things and to execute all such documents for the purpose of, or in connection with, the implementation of and giving effect to the Framework Agreement and the transactions ancillary thereto and of administrative nature which he/she considers necessary, desirable or expedient.”
By order of the Board GCL-Poly Energy Holdings Limited Mr. Zhu Gongshan Chairman
Hong Kong, 12 December 2017
Notes:
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(1) Any shareholder of the Company entitled to attend and vote at the EGM is entitled to appoint another person as his/her proxy to attend and vote instead of him/her. A shareholder of the Company who is the holder of two or more shares may appoint more than one proxy to attend on the same occasion. A proxy need not be a shareholder of the Company.
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(2) In order to be valid, a form of proxy and the power of attorney (if any) or other authority (if any) under which it is signed, or a certified copy of such power or authority, must be deposited with the Company’s Hong Kong share registrar, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time fixed for holding the EGM or any adjournment thereof.
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(3) Shareholders of the Company who are entitled to vote at the EGM are whose names appear as shareholders on the register of members of the Company as at the close of business on 29 December 2017. In order to qualify for the right to attend and vote at the EGM, all transfers, accompanied by the relevant share certificates, must be lodged for registration with the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4:30 p.m. on 29 December 2017.
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(4) Delivery of the form of proxy will not preclude a shareholder of the Company from attending and voting in person at the EGM convened and in such event, the form of proxy shall be deemed to be revoked.
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(5) In the case of joint registered holders of any share, any one of such joint registered holders may vote at the EGM, either in person or by proxy, in respect of such share as if he/she were solely entitled thereto, but if more than one of such joint registered holders be present at the EGM, the vote of the senior who tenders a vote either personally or by proxy shall be accepted to the exclusion of the votes of the other joint registered holders and, for this purpose, seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.
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NOTICE OF EXTRAORDINARY GENERAL MEETING
As at the date of this notice, the executive directors of the Company are Mr. Zhu Gongshan (Chairman), Mr. Zhu Zhanjun, Mr. Ji Jun, Mr. Zhu Yufeng, Ms. Sun Wei, Mr. Yeung Man Chung, Charles, Mr. Jiang Wenwu and Mr. Zheng Xiongjiu; and the independent non-executive directors of the Company are Ir. Dr. Ho Chung Tai, Raymond, Mr. Yip Tai Him, Dr. Shen Wenzhong and Mr. Wong Man Chung, Francis.
- All of the English titles or names of the PRC entities, as well as certain items contained in this circular have been included for identification purpose only and may not necessarily be the official English translations of the corresponding Chinese titles or names. If there is any inconsistency between the English translations and the Chinese titles or names, the Chinese titles or names shall prevail.
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