GCL Technology Holdings Limited - Proxy Solicitation & Information Statement 2019

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 a stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in GCL-Poly Energy Holdings Limited (保利協鑫能源控股有限公司), you should at once hand this circular and the accompanying proxy form to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

==> picture [111 x 55] intentionally omitted <==

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)

(1) DISCLOSEABLE TRANSACTION DISPOSAL OF 70% EQUITY INTEREST IN SUBSIDIARIES (2) POSSIBLE MAJOR TRANSACTION GRANT OF PUT OPTION

AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Capitalised terms used in this cover 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 7 to 25 of this circular.

A notice convening the Extraordinary General Meeting of the Company to be held at Centenary Room III, G/F., Marco Polo Hongkong Hotel, 3 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong on Friday, 19 July 2019 at 11:00 a.m. is set out on pages EGM-1 to EGM-2 of this circular.

Irrespective of whether you are able to attend the Extraordinary General Meeting, please complete the accompanying proxy form in accordance with the instructions printed thereon and deposit the same at the Hong Kong branch share registrar and transfer office of the Company, Tricor Investor Services Limited, as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the Extraordinary General Meeting or any adjournment thereof. The address of Tricor Investor Services Limited is currently Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong. With effect from 11 July 2019, Tricor Investor Services Limited will change its address to Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong. Completion and return of the proxy form will not preclude you from attending and voting in person at the Extraordinary General Meeting or any adjournment thereof should you so wish and in such event, the proxy form shall be deemed to be revoked.

28 June 2019

		Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		7
APPENDIX I	– FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . . . . . . .	I-1
APPENDIX II	– GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . .		EGM-1

DEFINITIONS

In this circular, the following expressions shall have the meanings set out below unless the context requires otherwise:

“affiliated parties” has the same meaning ascribed to it under “Accounting Standards for Enterprises No. 36 – Disclosure of Affiliated Parties (企業會計準則第36號–關聯方披露)” “Announcement” the Company’s announcement dated 23 May 2019 in relation to the Disposals and the Put Options

“Base Date” 30 November 2018

“Board” the board of Directors
“Business Day” a day on which banks in China are open for general commercial business, other than a Saturday, Sunday or public holiday in China
“Closing Date” the date of issuance as stated on the new business certificate of the Target Company
“Closing Audit Report” the closing audit report prepared by an auditing agency to audit the financial status of the Target Companies in the period from the Base Date to the Closing Date in accordance with the Share Purchase Agreements
“Company” GCL-Poly Energy Holdings Limited (保利協鑫能源控股有限公司), a company incorporated in the Cayman Islands with limited liability and the shares of which are listed on the Main Board of the Stock Exchange, with stock code 3800. As at the Latest Practicable Date, the Company is interested in approximately 62.28% of the issued share capital of GNE
“connected persons” has the same meaning ascribed to it under the Listing Rules “Consideration” the consideration for the transactions contemplated under the Share Purchase Agreements, being the aggregate of the Share Price and the Shareholder’s Loan Price
“Directors” the directors of the Company

“Disposals”

the proposed disposals of the Sale Shares and the Sale Shareholder’s Loan by the Seller to the Purchaser as contemplated under the Share Purchase Agreements

DEFINITIONS

“Effective Date”	the date on which the Share Purchase Agreements become
	effective, which is when the necessary approvals for the
	Transactions are obtained from, or the necessary filings are made
	with, the relevant PRC authorities
“EGM”	the extraordinary general meeting of the Company to be convened
	to consider and, if thought fit, approve the Put Options and the
	entering into and performance of obligations under the Share
	Purchase Agreements
“Fenxi GCL”	Fenxi County GCL Photovoltaic Co., Ltd.* (汾西縣協鑫光伏電力
	有限公司), a company established in the PRC with limited liability
	and an indirect subsidiary of GNE and the Company
“Final Date for Fulfilment of the	45 days after the date of the Share Purchase Agreements
Conditions Precedent”
“GNE”	GCL New Energy Holdings Limited (協鑫新能源控股有限公司), a
	company incorporated in Bermuda with limited liability and the
	shares of which are listed on the Main Board of the Stock
	Exchange, with stock code 451
“GNE Directors”	the directors of GNE
“GNE Group”	GNE and its subsidiaries
“GNE SGM”	the special general meeting of GNE to be convened to consider and,
	if thought fit, approve the Transactions and the entering into and
	performance of obligations under the Share Purchase Agreements
“GNE Shareholders”	the shareholders of GNE
“GP”	Tibet Yunshang Investment Fund Management Co., Ltd.* (西藏雲
	尚股權投資基金管理有限公司), a company incorporated in the
	PRC with limited liability
“Group”	The Company and its subsidiaries
“Guarantor” or “Nanjing GCL	Nanjing GCL New Energy Development Co., Ltd.* (南京協鑫新能
New Energy”	源發展有限公司), a company incorporated in the PRC with limited
	liability and an indirect wholly-owned subsidiary of GNE and an
	indirect subsidiary of the Company

DEFINITIONS

“Hanneng Guangping”
Hanneng Guangping County Photovoltaic Development Co., Ltd.* (邯能廣平縣光伏電力開發有限公司), a company established in the PRC with limited liability and an indirect subsidiary of GNE and the Company
“Hebei GNE” Hebei GCL New Energy Co., Ltd.* (河北協鑫新能源有限公司), a company established in the PRC with limited liability and an indirect subsidiary of GNE and the Company
“Hong Kong”

Hong Kong Special Administrative Region of the PRC

“Investment Fund”
Ningbo Rongshang Investment Partnership (Limited Partnership)* (寧波榕尚投資合夥企業（有限合夥）), a limited partnership established under the laws of the PRC
“Latest Practicable Date”
26 June 2019, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular
“Listing Rules”
the Rules Governing the Listing of Securities on the Stock Exchange
“Material Adverse Effect”
means any agreement, arrangement, event, condition:
(i) caused by the failure by the Seller, the Target Companies or the Project Companies to perform any obligations under relevant laws or the Share Purchase Agreements, capable of causing a negative impact on the relevant Project Company’s annual pre-tax or operating income by 5% or more compared to its previous year; or
(ii) that is capable of affecting the normal operation of the Target Companies or the Project Companies, including but not limited to such companies obtaining the relevant qualifications, permits, filings, registrations, approval, etc.
“MW”

megawatt(s)

“OMM Agreements”

the two operation, maintenance and management agreements dated 22 May 2019 entered into between Suzhou GCL Operation, Shanxi GNE and Hebei GNE, pursuant to which Suzhou GCL Operation (and/or its affiliates) agreed to provide operation, maintenance and management services to Shanxi GNE and Hebei GNE (and/or their affiliates) in relation to the solar power plants held by the Target Companies

DEFINITIONS

“PRC”

“Pre-Closing Reorganisation”
“Project Company(ies)”
“Purchaser”
“Put Options”
“RMB”
“Ruicheng GCL”

the People’s Republic of China, and for the purpose of this circular, excluding Hong Kong, the Macao Special Administrative Region of the People’s Republic of China and Taiwan

certain pre-closing reorganisations required under the Share Purchase Agreements, under which (a) all subsidiaries of the Target Companies that are not within the scope of the Share Purchase Agreements shall be transferred (applicable to Share Purchase Agreements I and VII only); (b) the Seller shall acquire 0.58% of the equity interest in Yu County Jinyang (as at the Latest Practicable Date, the Seller holds the remaining 99.42% of the equity interest in Yu County Jinyang) from Sungrow Power Supply Co., Ltd.* (陽光電源股份有限公司) (applicable to Share Purchase Agreement IV only) so that the Seller can own 100% of the equity interest in the entity which would in turn allow it to have clean ownership in the entity free from other minority interests. Sungrow Power and its ultimate beneficial owner are third parties independent of the Company and GNE and their connected persons; (c) the debts owed by each Project Company to its shareholders and affiliated parties shall be restructured as owing to the Target Company (applicable to Share Purchase Agreements I and VII only); and (d) the debts owed by the Target Company to its shareholders and affiliated parties shall be restructured as owing to the Seller

direct subsidiaries of the Target Companies, details of which can be found in the section headed “Information on the Target Companies” of this circular
Shanghai Rongyao New Energy Co., Ltd.* (上海榕耀新能源有限公司), a company incorporated in the PRC with limited liability and a subsidiary controlled by the Investment Fund
the put options granted to the Purchaser and/or the Target Company under the Share Purchase Agreement, pursuant to which the Purchaser and/or the Target Company is entitled to, upon the occurrence of certain specified events, request the Seller to repurchase (a) the Sale Shares and/or the entire equity interests of any Project Company held by the Target Company; and (b) the relevant shareholder’s loans outstanding at the time
Renminbi, the lawful currency of the PRC
Ruicheng County GCL Photovoltaic Co., Ltd.* (芮城縣協鑫光伏電力有限公司), a company established in the PRC with limited liability and an indirect subsidiary of GNE and the Company
4 -

DEFINITIONS

“Sale Shares”

70% of the equity interest in the Target Companies held by the Seller

“Sale Shareholder’s Loan” 70% of the Shareholder’s Loan
“Seller” or “Suzhou GCL Suzhou GCL New Energy Investment Co., Ltd.* (蘇州協鑫新能源 New Energy” 投資有限公司), a company established in the PRC with limited liability and an indirect subsidiary of GNE and the Company
“Shanxi GNE” Shanxi GCL New Energy Technologies Co., Ltd.* (山西協鑫新能源科技有限公司), a company established in the PRC with limited liability and an indirect subsidiary of GNE and the Company

“Share Pledge Agreements” the share pledge agreements dated 22 May 2019 entered into between the Seller and the Purchaser whereby the Seller agrees to pledge its remaining equity interest in Shanxi GNE and Hebei GNE (being 30% of the equity interest in Shanxi GNE and Hebei GNE) to the Purchaser as a security for the performance of its obligations under the Share Purchase Agreements

“Share Price” the consideration for the Sale Shares

“Share Purchase Agreements” a series of seven equity transfer and joint venture agreements (numbered I to VII) dated 22 May 2019 entered into between the Seller and the Purchaser in relation to the Transactions

“Shareholders” the shareholders of the Company
“Shareholder’s Loan”
the outstanding balance of loans between the Target Companies and the Seller upon the completion of the Pre-Closing Reorganisation
“Shareholder’s Loan Price” the consideration for the Sale Shareholder’s Loan
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“subsidiaries” has the same meaning ascribed to it under the Listing Rules
“Subscription Intention Agreement”

the subscription intention agreement dated 22 May 2019 between Yunnan Energy Investment Group and the GP pursuant to which Yunnan Energy Investment Group agreed to, subject to certain conditions, subscribe for the interest in the Investment Fund and become a limited partner by entering into a limited partnership agreement

DEFINITIONS

“Suzhou GCL Operation”
Suzhou GCL New Energy Operation and Technology Co., Ltd.* (蘇州協鑫新能源運營科技有限公司), a company established in the PRC with limited liability and an indirect wholly-owned subsidiary of GNE and an indirect subsidiary of the Company
“Target Company(ies)”
the seven target companies being the subject of the Disposals, details of which can be found in the section headed “Information on the Target Companies” of this circular
“Target Project(s)” 19 operational solar power plants in the PRC owned by the Target Companies with an aggregate installed capacity of approximately 977MW located in the PRC
“Transactions” the transactions contemplated under the Share Purchase Agreements, including the Disposals and the Put Options
“Yu County GCL” Yu County GCL Photovoltaic Co., Ltd.* (盂縣協鑫光伏電力有限公司), a company established in the PRC with limited liability and an indirect subsidiary of GNE and the Company
“Yu County Jinyang” Yu County Jinyang New Energy Power Generation Co., Ltd.* (盂縣晉陽新能源發電有限公司), a company established in the PRC with limited liability and an indirect subsidiary of GNE and the Company
“Yunnan Energy Investment Group” Yunnan Energy Investment Group Co., Ltd.* (雲南能源投資集團有限公司), a company incorporated in the PRC with limited liability and a PRC state-owned enterprise
“%” per cent.
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.
6 -

LETTER FROM THE BOARD

==> picture [111 x 54] intentionally omitted <==

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 Mr. Zhu Zhanjun Mr. Zhu Yufeng Ms. Sun Wei Mr. Yeung Man Chung, Charles Mr. Jiang Wenwu Mr. Zheng Xiongjiu

Independent non-executive Directors:

Ir. Dr. Raymond Ho Chung Tai Mr. Yip Tai Him Dr. Shen Wenzhong Mr. Wong Man Chung, Francis

Registered office:

Cricket Square, Hutchins Drive P.O. Box 2681 Grand Cayman, KY1-1111 Cayman Islands

Principal place of

business in Hong Kong: Unit 1703B – 1706, Level 17 International Commerce Centre 1 Austin Road West Kowloon, Hong Kong

28 June 2019

To the Shareholders

Dear Sir or Madam,

(1) DISCLOSEABLE TRANSACTION DISPOSAL OF 70% EQUITY INTEREST IN SUBSIDIARIES (2) POSSIBLE MAJOR TRANSACTION GRANT OF PUT OPTION

1. INTRODUCTION

We refer to the Company’s announcement published on 23 May 2019 (the “ Announcement ”). As disclosed in the Announcement, the Seller entered into a series of seven Share Purchase Agreements with the Purchaser and the Guarantor pursuant to which the Seller agreed to, among other things, (a) sell the Sale Shares and the Sale Shareholder’s Loan; and (b) grant the Put Options, to the Purchaser and/or the Target Companies.

LETTER FROM THE BOARD

2. THE SHARE PURCHASE AGREEMENT

The principal terms of the Share Purchase Agreements are set out below:–

Date

22 May 2019 (after trading hours)

Parties

(i) The Seller Suzhou GCL New Energy Investment Co., Ltd.* (蘇州協鑫新能源投資有限公司)
(ii) The Purchaser Shanghai Rongyao New Energy Co., Ltd.* (上海榕耀新能源有限公司)
(iii) The Guarantor Nanjing GCL New Energy Development Co., Ltd.* (南京協鑫新能源發展有限公司)

Assets to be sold

(i) The Sale Shares, being 70% of the equity interests in each Target Company
(ii) The Sale Shareholder’s Loan, being 70% of the Shareholder’s Loan in relation to each Target Company

The Target Companies own 19 operational solar power plants in the PRC with an aggregate installed capacity of approximately 977MW.

The table below sets out the Target Companies under each of the Share Purchase Agreements:

Share Purchase
Agreements	Target Companies
I	Shanxi GCL New Energy Technologies Co., Ltd. (山西協鑫新能源科技有限公司) (“Shanxi*
	GNE”)
II	Fenxi County GCL Photovoltaic Co., Ltd. (汾西縣協鑫光伏電力有限公司) (“Fenxi GCL*”)
III	Ruicheng County GCL Photovoltaic Co., Ltd. (芮城縣協鑫光伏電力有限公司) (“Ruicheng*
	GCL”)
IV	Yu County Jinyang New Energy Power Generation Co., Ltd.* (盂縣晉陽新能源發電有限公司)
	(“Yu County Jinyang”)
V	Yu County GCL Photovoltaic Co., Ltd. (盂縣協鑫光伏電力有限公司) (“Yu County GCL*”)
VI	Hanneng Guangping County Photovoltaic Development Co., Ltd.* (邯能廣平縣光伏電力開發
	有限公司) (“Hanneng Guangping”)
VII	Hebei GCL New Energy Co., Ltd. (河北協鑫新能源有限公司) (“Hebei GNE*”)

For further information relating to the Target Companies, please refer to the section headed “Information on the Target Companies” below.

LETTER FROM THE BOARD

Upon Completion, 70% of the equity interests in the Target Companies will be held by the Purchaser and 30% of the equity interests in the Target Companies will be held by the Seller. As at the Latest Practicable Date, GNE has no plans to dispose of its remaining 30% equity interests in the Target Companies upon Completion.

Consideration

The Consideration under each of the Share Purchase Agreements shall be an aggregate of (i) the consideration for the Sale Shares (the “ Share Price ”) and (ii) the consideration for the Sale Shareholder’s Loan (the “ Shareholder’s Loan Price ”). The aggregate Consideration under the Share Purchase Agreements is RMB1,740,616,700, of which the final Shareholder’s Loan Price will be determined pursuant to the Closing Audit Report.

The table below sets out the consideration in respect of the Target Companies under each of the Share Purchase Agreements:

Share Purchase Agreements I II III IV V VI VII Total	Share Price RMB 176,960,000 174,300,000 120,400,000 291,200,000 98,700,000 89,600,000 656,110,000 1,607,270,000	Estimated Shareholder’s Loan Price RMB 68,505,900 0 31,626,300 13,570,400 0 19,644,100 0 133,346,700	Consideration RMB 245,465,900 174,300,000 152,026,300 304,770,400 98,700,000 109,244,100 656,110,000
			1,740,616,700

Basis of the Consideration

(i) The Share Price was determined after arm’s length negotiations between the Seller and the Purchaser, taking into account, among other things: (i) the net asset value of each of the Target Companies as at the Base Date (i.e. 30 November 2018); and (ii) the financial performance of each of the Target Companies;
(ii) The Shareholder’s Loan Price was estimated based on 70% of the carrying amount of the Shareholder’s Loan of the Target Companies as at the Base Date (on a dollar-fordollar basis). Following Completion, the final Shareholder’s Loan Price will be determined pursuant to the Closing Audit Report based on 70% of the carrying amount of the Shareholder’s Loan of the Target Companies as at the Closing Date (on a dollarfor-dollar basis).
9 -

LETTER FROM THE BOARD

The difference between the final Shareholder’s Loan Price and the estimated Shareholder’s Loan Price as at the Base Date shall be payable within three months of the Closing Date. Please refer to the sections headed “Closing Audit Report and profitsharing arrangement” and “Payment arrangements” below.

The Purchaser is a special purpose vehicle of a fund primarily funded by a PRC state-owned enterprise. Accordingly, the Transactions required approval from the State-owned Assets Supervision and Administration Commission of the State Council (“ SASAC ”). This approval process is complicated and time consuming. As such, for the purposes of such approval, the parties agreed to use the net asset value as the basis of negotiating and determining the Consideration.

The Share Price, being the consideration for the Sale Shares, represents an excess of RMB94,200,400 over the net book value of the assets in the Disposals of RMB1,513,069,600, being 70% of the net asset value of the Target Companies as at the Base Date. The GNE Directors and the Directors consider that the basis of the Consideration is fair and reasonable and on normal commercial terms.

As at 31 May 2019, the outstanding loan balance between the Target Companies and the Seller are as follows:

Share Purchase Agreement Target Company I Shanxi GNE II Fenxi GCL III Ruicheng GCL IV Yu County Jinyang V Yu County GCL VI Hanneng Guangping VII Hebei GNE Total	Outstanding loan balances as at 31 May 2019 RMB’000 114,146 – 26,901 41,557 48,440 14,514 – 245,558	70% of outstanding loan balances as at 31 May 2019 RMB’000 79,902 – 18,830 29,090 33,908 10,160 –
		171,890

Except for the changes of the outstanding loan balances arising from normal business operation, the GNE Directors and Directors do not expect any material change in the outstanding loan balance upon the completion of the Pre-Closing Reorganisation.

Payment arrangements

The aggregate Consideration under the Share Purchase Agreements shall be paid by the Purchaser to the Seller in the following manner:

10 -

LETTER FROM THE BOARD

Payment of the Share Price

First instalment

RMB1,125,089,000, being 70% of the aggregate Share Price, shall be payable within 10 Business Days after the delivery of the relevant closing deliverables under each of the Share Purchase Agreements.

Second instalment

RMB370,201,000, being the aggregate Share Price less (i) the amount paid in the first instalment; and (ii) the amounts to be paid under the third and fourth instalments, shall be payable within 15 Business Days from the later of:

(a) the issuance of the Closing Audit Report (defined below); and
(b) the completion of the relevant registration or filing of the change in the relevant Target Company or Project Company’s legal representative, director, supervisor and senior management.

Third instalment RMB46,720,000, representing the security deposit for the Seller’s rectification of defects in the Project Companies in accordance with the Share Purchase Agreements.

Specified portion of the third instalment shall be paid to the Seller within 10 Business Days after the Seller has completed the rectification of a specific defect and the delivering of relevant evidence of rectification to the satisfaction of the Purchaser.

Fourth instalment RMB65,260,000, being 10% of the aggregate Share Price, representing the guarantee that certain Target Projects that are currently not in the National Subsidy Catalogue (as defined below) will enter such catalogue. Such amount is determined through negotiations between the parties to the Share Purchase Agreements and is not linked to the amount of national subsidy to be received by the Target Companies.

11 -

LETTER FROM THE BOARD

After the Closing Date and within 15 Business Days after each Target Project’s application for national subsidy is accepted, the Purchaser shall pay 50% of the relevant portion of the fourth instalment to the Seller.

Within 15 Business Days after the Project Company is accepted to the National Subsidy Catalogue, the Purchaser shall pay the remaining 50% of the relevant portion of the fourth instalment to the Seller. The timeline regarding the application for the national subsidy and acceptance in the catalogue is based entirely on the PRC government which will announce the release of a new National Subsidy Catalogue from time to time. Therefore, there is no deadline for the payment of the fourth instalment under the Share Purchase Agreements.

Payment of the Shareholder’s Loan Price

First instalment RMB133,346,700, being the estimated Shareholder’s Loan Price as at the Base Date, shall be payable within 10 Business Days after the delivery of the closing deliverables under each of the relevant Share Purchase Agreements.

Second instalment The difference between the final Shareholder’s Loan Price as ascertained by the Closing Audit Report (defined below) and the amount paid in the first instalment shall be payable within three months of the Closing Date.

In addition, the Purchaser shall procure the Project Companies/Target Companies to pay to the Seller its dividend entitlement of RMB322,111,700, which represents the amount of the dividend declared and payable by the Target Companies to the Seller as at the Base Date in the following manner:

Dividends declared by Project After the Closing Date and within 10 Business Days Companies/Target Companies that after the Project Company/Target Company receives are currently in the National the national subsidy that is payable as of the Base Subsidy Catalogue Date, the Purchaser shall procure the Project Company/Target Company to pay the full amount of the dividend payable as of the Base Date to the Seller.

12 -

LETTER FROM THE BOARD

Dividends declared by Project Companies/Target Companies that are not currently in the National Subsidy Catalogue

After the Closing Date and within 10 Business Days after the Target Project’s application for national subsidy is accepted, the Purchaser shall procure the Project Company/Target Company to pay 50% of the dividend payable as of the Base Date to the Seller.

Within 10 Business Days after the Target Project is accepted to the National Subsidy Catalogue, the Purchaser shall procure the Project Company/Target Company to pay the remaining 50% of the dividend payable as of the Base Date to the Seller.

The relevant amount of the national subsidy which is subject to approval for registration into the National Renewable Energy Tariff Surcharge Subsidy Catalogue (可再生能源電價附加資金補助目錄) (the “ National Subsidy Catalogue ”) by the PRC government have been recognised in the financial statements of the Project Companies/Target Companies to the extent that it is highly probable that a significant reversal will not occur.

Pursuant to the Notice on Exerting Price Leverage to Promote the Healthy Development of the Photovoltaic Industry (NDRC Price [2013] No. 1638) 《國家發展改革委關於發揮價格槓桿作用促( 進光伏產業健康發展的通知》 (發改價格[2013]1638號)) issued in August 2013 by the National Development and Reform Commission of the PRC (the “ New Tariff Notice ”) and other applicable laws and regulations, solar power plant projects are in principle entitled to be registered in the National Subsidy Catalogue and receive the national subsidy as long as certain specified conditions are fulfilled, including achieving on-grid connection and obtaining the following documents:

(1) the project approval document for filing purpose;
(2) the project on-grid price approval document;
(3) the project feasibility study report; and
(4) the project access system design review and comments.

The solar power plants currently operated by the Project Companies/Target Companies have already obtained or to obtain without any material legal impediment the above documents (1) to (4) and have already achieved on-grid power generation as required in the New Tariff Notice in relation to the entitlement of tariff adjustments. Hence, it is expected that these solar power plants will be registered in the National Subsidy Catalogue in due course and the accrued revenue on tariff subsidy will be fully recoverable.

Effective date and conditions

The effectiveness of the Share Purchase Agreements is subject to the obtaining of the necessary approvals for the Transactions from, or making of the necessary filings with, the relevant PRC authorities.

13 -

LETTER FROM THE BOARD

The date on which the above condition to effectiveness is fulfilled shall be the Effective Date.

Conditions precedent

Closing under each of the Share Purchase Agreements is subject to the fulfilment or (if applicable) waiver of certain conditions precedent:

(i) the completion of the Pre-Closing Reorganisation;
(ii) the obtaining of all required permits and consents, including: the Seller and the Guarantor having obtained all the necessary consents, permits and other documents required for the entering into and performance of their respective obligations under the Share Purchase Agreements in accordance with applicable laws, regulations, finance documents (if applicable) and constitutional documents, including the passing of an ordinary resolution approving the transactions contemplated under the Share Purchase Agreements in accordance with the Listing Rules by (a) the GNE Shareholders at the GNE SGM; and (b) the Shareholders at the EGM;
(iii) the Seller having procured the Target Company and the Project Companies to obtain key compliance documents from the relevant authorities specified in the Share Purchase Agreements (or a compliance confirmation letter or other documentations from the relevant authorities to the satisfaction of the Purchaser if such key compliance documents are not available);
(iv) the Seller having obtained the notification from the relevant business registration authority for the registration of the share pledge over its remaining equity interest in Shanxi GNE or Hebei GNE pursuant to the Share Pledge Agreements;
(v) there being no event which has a Material Adverse Effect on the Target Company and the Project Companies (or such events having been rectified);
(vi) there being no law, judgment, decision, prohibition or order made by relevant authorities restricting, prohibiting or cancelling the transfer of the Sale Shares; and
(vii) the statements, representations, warranties and undertakings of the Seller being true, complete and accurate.

The Seller undertakes to the Purchaser that all the conditions precedent will be fulfilled after 45 days of the date of the Share Purchase Agreements (the “ Final Date for Fulfilment of the Conditions Precedent ”). If any conditions precedent cannot be fulfilled before the Final Date for Fulfilment of the Conditions Precedent, the Purchaser can request the Seller to pay liquidated damages of 0.05% of the Share Price for each day of delay, subject to a cap of 5% of the Share Price. The Purchaser can terminate the Share Purchase Agreements if the conditions precedent have not been fulfilled after 60 days of the Final Date of Fulfilling the Conditions Precedent.

14 -

LETTER FROM THE BOARD

Closing

Closing shall take place within five Business Days (or any longer period as specified by the Purchaser in writing) after all the conditions precedent have been fulfilled or waived (as the case may be).

The date of the issuance as stated on the new business certificate of the Target Company shall be the Closing Date.

Closing Audit Report and profit-sharing arrangement

Pursuant to the Share Purchase Agreements, the Seller and the Purchaser shall engage an auditing agency to audit the financial condition of the Target Companies for the period from the Base Date (i.e. 30 November 2018) to the Closing Date and prepare a closing audit report within 30 days after the Closing Date (the “ Closing Audit Report ”).

The Closing Audit Report shall ascertain, among other things, the final Shareholder’s Loan Price based on 70% of the carrying amount of the Shareholder’s Loan of the Target Companies as at the Closing Date (on a dollar-for-dollar basis).

Subject to certain exceptions, the Seller and the Purchaser shall share the profits or losses incurred from the daily operations of the Target Companies and the Project Companies during the period from the Base Date to the Closing Date in accordance with their respective post-closing shareholding in the Target Companies.

As the Transactions required SASAC approval as at the Base Date, the Seller and the Purchaser negotiated the Transactions on the basis that the risks and rewards of the business would be shared between the Purchaser and the Seller in proportion to their post-closing shareholdings as from the Base Date. However, as the control over the Target Companies has not been passed to the Purchaser as at the Base Date, the financial results of the Target Companies will continue to be consolidated into the Group’s accounts until the Closing Date when the actual control has been transferred to the Purchaser.

From the Company’s perspective, any profits or losses arising from the daily operations during such period will be shared in proportion to the post-closing shareholdings of the Purchaser and Seller. During such period, such profits or losses will be reflected in the net asset value of the Target Companies (i.e. the net asset value will increase by the amount of profits attributable to the relevant Target Company and decrease by the amount of losses attributable to the relevant Target Company). As the Share Price for the Disposals is fixed and the Target Companies will not be declaring dividends during the relevant period, the changes in the net asset value of the Target Companies during the period will be shared by the Purchaser and Seller in proportion to their post-closing shareholding as from the Closing Date from an accounting perspective.

This profit-sharing arrangement was negotiated as part of the commercial terms between the parties to the Share Purchase Agreements. As the Transactions required SASAC approval as at the Base Date, the Seller and the Purchaser negotiated the Transactions on the basis that the risks and

15 -

LETTER FROM THE BOARD

rewards of the business would pass to the Purchaser as from the Base Date. The financial results of the Target Companies will continue to be consolidated into the Group’s accounts until the Closing Date when the actual risks and rewards have been transferred to the Purchaser.

The Directors believe that the profit-sharing arrangement is fair and reasonable, because the Consideration already includes a premium to the net asset value of the Target Companies which takes into account the profit-sharing arrangement.

Post-closing management of the Target Companies

After the Closing Date, the board of directors of Shanxi GNE and Hebei GNE shall comprise seven directors, and they shall be nominated by shareholders and elected at the shareholders’ meeting. The Purchaser is entitled to nominate five directors and the Seller is entitled to nominate two directors. The other Target Companies (including Fenxi GCL, Ruicheng GCL, Yu County Jinyang, Yu County GCL and Hanneng Guangping) shall appoint one executive director, to be recommended by the Purchaser and elected at the shareholders’ meeting. The Target Companies will appoint one general manager to be recommended by the Seller.

After the Closing Date, Shanxi GNE and Hebei GNE shall establish a board of supervisors comprising three supervisors. The Purchaser and the Seller will each be entitled to nominate one supervisor. The remaining supervisor shall be the employee supervisor elected by all the employees or at the employee representative meeting. The other Target Companies (including Fenxi GCL, Ruicheng GCL, Yu County Jinyang, Yu County GCL and Hanneng Guangping) shall have one supervisor nominated by the Purchaser and appointed at the shareholders’ meeting.

Security

Pursuant to the Share Purchase Agreements, the Guarantor agreed to provide a guarantee on a joint and several basis to secure the due performance by the Seller of its obligations under the Share Purchase Agreements.

In connection with the Share Purchase Agreements, the Seller and the Purchaser have entered into the Share Pledge Agreements on 22 May 2019, pursuant to which the Seller agreed to pledge its remaining equity interest in Shanxi GNE and Hebei GNE (being 30% of the equity interests of Shanxi GNE and Hebei GNE) to the Purchaser as security for the due performance of its obligations under the Share Purchase Agreements.

Grant of Put Options

(a) Repurchase of Project Company

Within five years of the Closing Date and at the option of the Purchaser and/or the Target Company, the Seller shall be required to repurchase the entire equity interest of any Project Company and any outstanding shareholder’s loan advanced to the relevant Project Companies by the Target Company, the Purchaser and/or its affiliates in accordance with the Share Purchase Agreements upon

16 -

LETTER FROM THE BOARD

the occurrence of certain specified events, such as certain material defaults not being rectified by the Seller within the specified period or any breaches not being rectified leading to certain administrative penalties being imposed on the Project Companies, etc.

(b) Repurchase of Target Company

Within five years of the Closing Date and at the option of the Purchaser, the Seller shall be required to repurchase the Sale Shares and any outstanding shareholder’s loan advanced to the Target Company or each of the Project Companies by the Purchaser and/or its affiliates in accordance with the Share Purchase Agreements if (i) the Purchaser has required the Seller to repurchase not less than 50% of the Project Companies held by the relevant Target Company pursuant to the Share Purchase Agreements; or (ii) the occurrence of other specified repurchase events.

(c) Repurchase price for (a) and (b)

The repurchase price for a Project Company or a Target Company shall be the aggregate of (i) the share repurchase price (calculated with reference to the equity investment cost of the Purchaser for the relevant Project Company or Target Company, adding the expected investment income of the Purchaser and less any dividend declared after the Closing Date); and (ii) the purchase price of the then outstanding shareholder’s loan.

The expected investment income = the equity investment cost of the Purchaser for the relevant Target Company or Project Company x 12% per annum x the number of days since the Purchaser’s investment/360 days.

3. THE OMM AGREEMENTS

In connection with the Transactions, Suzhou GCL Operation, Shanxi GNE and Hebei GNE, entered into the OMM Agreements on 22 May 2019, pursuant to which Suzhou GCL Operation (and/or its affiliates) agreed to provide operation, maintenance and management services to Shanxi GNE and Hebei GNE (and/or their affiliates) in relation to the solar power plants held by the Target Companies for a period of three years commencing on the Closing Date, renewable by another three years at the discretion of the Purchaser, Shanxi GNE and Hebei GNE.

As consideration for the Seller (and/or its affiliates) undertaking the operation, maintenance and management services, the Purchaser will pay the Seller a service fee calculated with reference to the electricity sale volume. In addition, the Purchaser will pay the Seller an incentive fee if it achieves in aggregate more than certain agreed minimum electricity sale volumes and revenues for each project operated by the Project Companies. Conversely, under the OMM Agreements and the Share Purchase Agreements, if the aggregate electricity sale volumes and revenues for each project operated by the Project Companies are less than the specified minimum electricity sale volumes and revenues, the Seller will compensate the Purchaser in accordance with the Share Purchase Agreements.

17 -

LETTER FROM THE BOARD

4. INFORMATION ON THE GROUP

The Group

The Group is an investment company and its subsidiaries are principally engaged in the manufacturing and sale of polysilicon and wafers products, and developing, owning and operation of solar farms. As at the Latest Practicable Date, the Company is interested in approximately 62.28% of the issued share capital of GNE.

The Seller

The Seller is a company incorporated in the PRC with limited liability and an indirect subsidiary of GNE and the Company. The Seller is principally engaged in photovoltaic power investment, investment management and consultation, business management consultation, technology development, technology transfer, technical advice related to photovoltaic power projects, and sales of photovoltaic materials and equipment.

5. INFORMATION ON THE PURCHASER

The Purchaser is a special purpose vehicle incorporated in the PRC with limited liability and is majority-held by Ningbo Rongshang Investment Partnership (Limited Partnership) (寧波榕尚投資合夥企業（有限合夥）) (the “ Investment Fund ”), a limited partnership established under the laws of the PRC which was formed for the purpose of investing in strategic emerging industry projects such as new energy, clean energy and new materials. The general partner of the Investment Fund is Tibet Yunshang Investment Fund Management Co., Ltd. (西藏雲尚股權投資基金管理有限公司), a company incorporated in the PRC with limited liability (the “ GP ”). The Investment Fund intends to raise funds of RMB6.001 billion and acquire the equity interests of the Target Companies under the Transactions through the Purchaser.

On 22 May 2019, Yunnan Energy Investment Group Co., Ltd. (雲南省能源投資集團有限公司) (“ Yunnan Energy Investment Group ”), a PRC state-owned enterprise, entered into a subscription intention agreement with the GP, pursuant to which Yunnan Energy Investment Group agreed to subscribe for interest in and become a limited partner of the Investment Fund by entering into a limited partnership agreement, conditional upon the obtaining of necessary PRC regulatory approvals (the “ Subscription Intention Agreement* ”). Under the Subscription Intention Agreement, the total capital commitment of Yunnan Energy Investment Group is RMB2.94 billion.

To the best of the Directors’ knowledge, information and belief after having made all reasonable enquiries, the Purchaser, the Investment Fund, the GP, Yunnan Energy Investment Group and their ultimate beneficial owner(s) are third parties independent of the Company and its connected persons.

18 -

LETTER FROM THE BOARD

6. INFORMATION ON THE TARGET COMPANIES

The table below sets out the information on the Target Companies under each of the Share Purchase Agreements:

Share Purchase Agreements Information on the Target Companies

I Shanxi GNE is a company incorporated in the PRC with limited liability and is principally engaged in investment holding. Shanxi GNE is the holding company of the Shanxi GNE group companies, whose business primarily consists of the development, investment, construction and operation of photovoltaic projects.
II Fenxi GCL is a company incorporated in the PRC with limited liability and is principally engaged in the development, investment, construction and operation of photovoltaic projects. Fenxi GCL is an indirect subsidiary of GNE and the Company.
III Ruicheng GCL is a company incorporated in the PRC with limited liability and is principally engaged in the development, investment, construction and operation of photovoltaic projects. Ruicheng GCL is an indirect subsidiary of GNE and the Company.
IV Yu County Jinyang is a company incorporated in the PRC with limited liability and is principally engaged in the development, investment, construction and operation of photovoltaic projects. Yu County Jinyang is an indirect subsidiary of GNE and the Company.
V Yu County GCL is a company incorporated in the PRC with limited liability and is principally engaged in the development, investment, construction and operation of photovoltaic projects. Yu County GCL is an indirect subsidiary of GNE and the Company.
VI Hanneng Guangping is a company incorporated in the PRC with limited liability and is principally engaged in the development, investment, construction and operation of photovoltaic projects. Hanneng Guangping is an indirect subsidiary of GNE and the Company.
VII Hebei GNE is a company incorporated in the PRC with limited liability and is principally engaged in investment holding. Hebei GNE is the holding company of the Hebei GNE group companies, whose business primarily consists of the development, investment, construction and operation of photovoltaic projects.
19 -

LETTER FROM THE BOARD

As at the Latest Practicable Date, Shanxi GNE and Hebei GNE hold equity interests in the following Project Companies:

		Name of immediate shareholder(s)/
Share Purchase		shareholding percentage attributable to
Agreements	Name of Project Companies	immediate shareholder(s)
I	Taigu County Fengguang Power Generation Co.,	Shanxi GNE (100%)
	Ltd.* (太谷縣風光發電有限公司)
I	Shanxi Yaoguang New Energy Technologies Co.,	Shanxi GNE (100%)
	Ltd.* (山西耀光新能源科技有限公司)
I	Licheng GCL Photovoltaic Co., Ltd.* (黎城協鑫	Shanxi GNE (100%)
	光伏電力有限公司)
I	Shanxi Jiasheng Energy Holding Co., Ltd.*	Shanxi GNE (96%)
	(山西佳盛能源股份有限公司)	Suzhou GNE (4%)
VII	Shangyi Yuanchen New Energy Development	Hebei GNE (100%)
	Co., Ltd.* (尚義元辰新能源開發有限公司)
VII	Shangyi GCL Photovoltaic Development Co.,	Hebei GNE (100%)
	Ltd.* (尚義協鑫光伏電力開發有限公司)
VII	Zhangjiakou GCL Photovoltaic Co., Ltd.* (張家	Hebei GNE (100%)
	口協鑫光伏發電有限公司)
VII	Quyang Jingtou New Energy Technologies Co.,	Hebei GNE (100%)
	Ltd.* (曲陽晶投新能源科技有限公司)
VII	Pingshan County Shijing New Energy	Hebei GNE (100%)
	Technologies Co., Ltd.* (平山縣世景新能源
	有限公司)
VII	Shineng Pingshan Photovoltaic Development Co.,	Hebei GNE (100%)
	Ltd.* (石能平山光伏電力開發有限公司)
VII	Wuji County Xiecheng Photovoltaic Co., Ltd.*	Hebei GNE (100%)
	(無極縣協誠光伏發電有限公司)
VII	Wuyi Runfeng New Energy Co., Ltd.* (武邑潤	Hebei GNE (100%)
	豐新能源有限公司）
VII	Wuyi Xinyang New Energy Co., Ltd.* (武邑新	Hebei GNE (100%)
	陽新能源有限公司)
VII	Lincheng GCL Photovoltaic Co., Ltd.* (臨城協	Hebei GNE (100%)
	鑫光伏發電有限公司)

20 -

LETTER FROM THE BOARD

Set out below is an extract of the audited financial statements prepared for the financial year ended 31 December 2017 and the unaudited management accounts for the year ended 31 December 2018 of the Target Companies prepared in accordance with China Accounting Standards:

		Year ended 31	December 2018	Year ended 31	December 2017
Share
Purchase		Profit	Profit	Profit (loss)	Profit (loss)
Agreements	Target Companies	before taxation	after taxation	before taxation	after taxation
		RMB’000	RMB’000	RMB’000	RMB’000
I	Shanxi GNE	33,994	30,211	32,538	32,538
II	Fenxi GCL	32,972	32,971	13,877	13,877
III	Ruicheng GCL	27,460	27,460	11,963	11,963
IV	Yu County Jinyang	49,952	46,723	48,339	48,339
V	Yu County GCL	14,639	14,639	(260)	(260)
VI	Hanneng Guangping	28,031	24,492	27,809	27,809
VII	Hebei GNE	189,822	186,260	206,776	206,725

As at the Base Date (i.e. 30 November 2018), the net asset value for each of the Target Companies are as follows:

Share Purchase Agreements Target Company I Shanxi GNE II Fenxi GCL III Ruicheng GCL IV Yu County Jinyang V Yu County GCL VI Hanneng Guangping VII Hebei GNE Total	Net asset value RMB’000 219,849 169,315 166,129 318,578 155,419 160,786 971,452
	2,161,528

As at 31 December 2018, the aggregate net assets of the Target Companies amounted to approximately RMB1,997,000,000. The Directors are not aware of any material change in operating and/or financial condition of the Target Companies since the Base Date. The Directors therefore consider that the Share Price remains to be fair and reasonable.

21 -

LETTER FROM THE BOARD

7. FINANCIAL IMPACT OF THE TRANSACTIONS

After the Closing Date, the Target Companies and the Project Companies will cease to be subsidiaries of the GNE Group and the Group, and the profits and loss as well as the assets and liabilities of the Target Companies and the Project Companies will no longer be consolidated into the consolidated financial statements of the GNE Group and the Group.

The Company expects to realise profit on the Disposals of approximately RMB58,470,000 on the basis of the following calculation:

(i) the premium to the net asset value of the Target Companies as at the Base Date of approximately RMB94,200,400; less
(ii) the expected loss to be incurred from the Base Date to 31 May 2019 (being the latest practicable date for ascertaining such number) of approximately RMB30,730,400; less
(iii) the related transaction costs, taxes and expenses of the Disposals of approximately RMB5,000,000.

The premium to the net asset value of the Target Companies was determined with reference to such expected loss, estimated based on historical financial performances of the Target Companies for the corresponding period in previous years.

The expected loss to be incurred during the period from the Base Date to the Closing Date represents the loss to the Company arising from sharing 70% of the estimated profits of the Target Companies between the Base Date and 31 May 2019 under the profit-sharing arrangement.

The actual amount of gain/(loss) arising from the Disposals to be recognised by the Company is based on the actual completion date of the Disposals and will be subject to final audit by the auditors of the Company.

8. USE OF PROCEEDS FROM THE TRANSACTIONS

The net cash proceeds (net of estimated taxes and transaction costs) from the Transactions (including the Consideration and the payment of outstanding dividends from the Project Company/Target Company) is expected to be approximately RMB2,060,000,000, which GNE intends to use for repayments of its debts.

9. REASONS AND BENEFITS OF THE TRANSACTIONS

As part of its “transformation and upgrade” development objective, GNE has been taking steps towards transforming to an asset-light model. Upon completion of the Transactions, the Target Companies will no longer be subsidiaries of the GNE Group and the Group, and the profits and loss as well as the assets and liabilities of the Target Companies and the Project Companies will no longer be consolidated into the consolidated financial statements of the GNE Group and the Group. The liabilities of the GNE Group and the Group will decrease by approximately RMB5,799,000,000. Meanwhile, the cash derived from the Transactions amounted to approximately RMB2,060,000,000, which will be used for further repayment of

22 -

LETTER FROM THE BOARD

debts, and the gearing ratio of the GNE Group will decrease by approximately 2.34%, calculated with reference to the audited financial statements of the GNE Group in 2018, effectively reducing the financial risks.

Following the completion of the Transactions, the GNE Group will provide operation, maintenance and management services for the solar power plants held by the Target Companies under the OMM Agreements, which will generate stable service fees to the GNE Group.

Furthermore, leveraging on its solid financial strength, the Purchaser will strive to replace the related debts to reduce financial cost and enhance the yield of the solar power plants.

After the completion of the Transactions, the GNE Group and the Purchaser will further explore other co-operation opportunities, including but not limited to, in relation to the GNE Group’s existing solar power plants in the PRC.

Based on the above reasons and having considered all relevant factors, the GNE Directors believe and consider that the terms of the Transactions are on normal commercial terms, are fair and reasonable and that the entering into of the Share Purchase Agreements is in the interests of GNE and the GNE Shareholders as a whole.

Based on the views of the GNE Directors and having considered all relevant factors, the Directors believe and consider that the terms of the Transactions are on normal commercial terms, are fair and reasonable and that the entering into of the Share Purchase Agreements is in the interests of the Company and the Shareholders as a whole.

Shareholders and potential investors of the Company should note that Closing is subject to the satisfaction of the conditions precedent. Therefore, the Disposals may or may not proceed. Shareholders and potential investors of the Company are advised to exercise caution when dealing in securities of the Company, and are recommended to consult their professional advisers if they are in any doubt about their position and as to the action they should take.

10. LISTING RULES IMPLICATIONS

As the Seller, an indirect subsidiary of the Company, entered into the Disposals with the Purchaser within a 12-month period, the Disposals shall be aggregated as a series of transactions for the Company pursuant to Rule 14.22 of the Listing Rules.

Since the highest of the applicable percentage ratios in respect of the aggregate amount of the Disposals is over 5% but less than 25%, the entering into of the Disposals constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting and announcement requirements but exempt from the shareholders’ approval requirement under Chapter 14 of the Listing Rules.

As the Seller, an indirect subsidiary of the Company, entered into the Put Options with the Purchaser within a 12-month period, the Put Options shall be aggregated as a series of transactions for the Company pursuant to Rule 14.22 of the Listing Rules.

23 -

LETTER FROM THE BOARD

The Put Options are exercisable at the discretion of the Purchaser or the Target Companies upon the occurrence of certain specified events, with the exercise price for the Put Options to be determined in accordance with the terms of the Share Purchase Agreements. As the actual monetary value of the exercise price of the Put Options are not known at the time of granting the Put Options, the grant of the Put Options shall be classified as at least a major transaction for the Company pursuant to Rule 14.76(1) of the Listing Rules. The grant of the Put Options is therefore subject to the reporting, announcement and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

11. THE EGM

Set out on pages EGM-1 to EGM-2 of this circular is a notice convening the EGM to be held at Centenary Room III, G/F., Marco Polo Hongkong Hotel, 3 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong on Friday, 19 July 2019 at 11:00 a.m..

At the EGM, ordinary resolution(s) for approving the Transactions and the entering into and performance of obligations under the Share Purchase Agreements will be proposed for the Shareholder’s approval.

The resolution(s) will be voted by way of poll at the EGM. As at the Latest Practicable Date, no Shareholder has material interest in the Transactions (other than being a Shareholder) and therefore no Shareholder is required to abstain from voting on the relevant resolution(s) at the EGM.

A form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, please complete the form of proxy in accordance with the instructions printed thereon and deposit the same at the Hong Kong branch share registrar and transfer office of the Company, Tricor Investor Services Limited, as soon as possible and in any event by not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. The address of Tricor Investor Services Limited is currently Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong. With effect from 11 July 2019, Tricor Investor Services Limited will change its address to Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong. Completion and return of the form of proxy will not preclude you from attending and voting at the EGM should you so wish and in such event, the instrument appointing a proxy shall be deemed to be revoked.

12. CLOSURE OF REGISTER OF MEMBERS

The register of members of the Company will be closed from Tuesday, 16 July 2019 to Friday, 19 July 2019, both days inclusive, during which period no transfer of Shares will be registered, in order to determine the entitlement to attend and vote at the EGM. In order to be entitled to attend and vote at the EGM to be held on Friday, 19 July 2019, unregistered holders of Shares should ensure that all transfers of Shares accompanied by the relevant share certificates and properly completed transfer forms must be lodged for registration with the Hong Kong branch share registrar and transfer office of the Company, Tricor Investor Services Limited, no later than 4:30 p.m., Monday 15 July 2019. The address of Tricor Investor Services Limited is currently Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong. With effect from 11 July 2019, Tricor Investor Services Limited will change its address to Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

24 -

LETTER FROM THE BOARD

13. RECOMMENDATION

The Directors are of the view that the terms of the Transactions are fair and reasonable, and are on normal commercial terms and that the entering into of the Share Purchase Agreements is in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the ordinary resolution(s) to approve the Transactions and the entering into and performance of obligations under the Share Purchase Agreements as set out in the notice of the EGM.

14. ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendices to this circular.

Yours faithfully, By order of the Board GCL-Poly Energy Holdings Limited 保利協鑫能源控股有限公司

Zhu Gongshan

Chairman

25 -

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL INFORMATION OF THE GROUP

The audited consolidated financial statements of the Group for the years ended 31 December 2016, 31 December 2017 and 31 December 2018 together with the relevant notes thereto are disclosed in the following documents, which were published on both the Stock Exchange’s website (www.hkexnews.hk) and the Company’s website (www.gcl-poly.com):

the annual report of the Company for the year ended 31 December 2016 published on 19 April 2017 (pages 99 – 107);
the annual report of the Company for the year ended 31 December 2017 published on 16 April 2018 (pages 108 – 116); and
the annual report of the Company for the year ended 31 December 2018 published on 26 April 2019 (pages 118 – 129).

2. STATEMENT OF INDEBTEDNESS AND CONTINGENT LIABILITIES

At the close of business on 30 April 2019, being the latest practicable date for the purpose of this indebtedness statement, the Group had the following outstanding borrowings:

	The	Group
	Secured	Unsecured	Total
	RMB’000	RMB’000	RMB’000
Carrying amount of bank and other borrowings	39,593,253	11,106,292	50,699,545
Principal amount of notes and bonds payable	–	5,288,963	5,288,963
Carrying amount of loans from related companies	1,619,944	1,967,840	3,587,784
Gross lease liabilities	1,294,830	2,700,112	3,994,942
	42,508,027	21,063,207	63,571,234

The Group’s secured borrowings were secured, individually or in combination, by (i) certain property, plant and equipment and prepaid lease payments of the Group; (ii) certain pledged bank and other deposits of the Group; (iii) certain subsidiaries’ trade receivables, contract assets and fee collection rights in relation to the sales of electricity; (iv) amount due from an associate; and (v) certain equity interests in some project companies of the Group.

At 30 April 2019, certain borrowings of the Group amounting to RMB44,136,212,000 are guaranteed individually or in combination by entities within the Group. The remaining indebtedness amounting to RMB19,435,022,000 are not guaranteed.

I-1 -

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

In addition, the Group received approval letters from the National Association of Financial Market Institutional Investors in relation to the issuance of short-term commercial paper for a term up to 2 years in the maximum principal amount of RMB1,000 million and medium-term notes for a term up to 3 years in the maximum principal amount of RMB3,000 million to qualifying investors, which were outstanding for issuance as at 30 April 2019. Besides, the short-term commercial paper was fully underwritten.

The Group also received approval letters from the China Securities Regulatory Commission in relation to the issuance of corporate bonds for a term up to 2 years in the maximum principal amount of RMB1,500 million and public offering bonds for a term up to 3 years in the maximum principal amount of RMB3,000 million to qualifying investors, which were fully underwritten and outstanding for issuance as at 30 April 2019.

Save as aforesaid or otherwise disclosed herein, and apart from intra-group liabilities and normal trade payables in the ordinary course of business, as at the close of business on 30 April 2019, the Group did not have any debt securities authorised or created but unissued, or any term loans, other borrowings or indebtedness in the nature of borrowing including bank overdrafts, loans, liabilities under acceptances (other than normal trade bills), acceptance credits, hire purchase commitments, mortgages or charges, material contingent liabilities or guarantees outstanding.

To the best of the knowledge of the Directors, having made all reasonable enquiries, there has been no material change in the level of indebtedness of the Group since 30 April 2019.

3. WORKING CAPITAL STATEMENT

According to the Group’s cash flow projections, as at 30 April 2019, the Group’s total borrowings comprising bank and other borrowings, notes and bonds payable, loans from related companies and gross lease liabilities amounted to approximately RMB63,571 million.

The Directors have reviewed the Group’s cash flow projections which cover a period of not less than twelve months from the date of this circular. The Directors after due and careful enquiry, are of the opinion that, after taking into account the net proceeds from the Disposals and the financial resources available to the Group, including cash and cash equivalents on hand, cash flows from operating activities and available credit facilities, and based on the assumptions that the following financing plans and measures can be successfully executed, the Group will have sufficient working capital for its present operating requirements and to pay its financial obligations as and when they fall due and for at least the next twelve months from the date of this circular, in the absence of unforeseeable circumstances. However, if any of the following matters become unsuccessful, the Group will not have sufficient working capital for at least the next twelve months from the date of this circular.

i. Successful implementation of measures of GNE Group

GNE Group proposed to issue medium-term notes with an aggregate principal amount of not exceeding RMB3,000 million to institutional investors of the national interbank bond market in the PRC and public offering bonds with an aggregate principal amount of not exceeding RMB3,000 million in Shenzhen Stock Exchange in the PRC before their expiry date in June 2020 and September

I-2 -

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

2020, respectively. It is expected that the notes and bonds will be issued in one or more tranches and that each tranche of the notes and bonds shall have a maturity of three years. GNE Group is also negotiating with banks and other financial institutions for credit facilities.

In addition, GNE Group is implementing business strategies, among others, to transform its heavy-asset business model to a light-asset model by (i) divesting certain of its existing wholly-owned power plant projects in exchange for cash proceeds and to improve GNE Group’s indebtedness position; and (ii) striving for providing plant operation and maintenance services to those divested power plants for additional operating cash flow to GNE Group.

ii. Likelihood of successful completion of the disposal of 51% equity interest in GNE

On 3 June 2019, Elite Time Global Limited, a wholly-owned subsidiary of the Company, entered into a cooperation intent agreement with China Hua Neng Group Hong Kong Limited, a subsidiary of China Huaneng Group Co., Ltd., being a state-owned enterprise in the PRC, regarding the possible sale of 9,727,594,875 ordinary shares of GNE, representing approximately 51% of the entire issued share capital of GNE as at the date of this circular. The receipt of the expected proceeds from this sale included in the working capital forecast is subject to the successful completion of this proposed transaction before 31 December 2019.

Upon the completion of this proposed transaction, the Group will no longer control GNE, and accordingly, the Group's remaining 11.28% equity interest in GNE will be classified as equity instrument measured at fair value through other comprehensive income, and the Group will derecognise the assets and liabilities of GNE Group from its consolidated statement of financial position.

As at 31 December 2018, the Group’s total borrowings (comprising loans from related companies, bank and other borrowings, notes and bonds payable and obligations under finance leases) amounted to approximately RMB62,588 million, out of which 63.8% of the Group’s total borrowings amounting to approximately RMB39,932 million were attributable to GNE Group.

iii. Likelihood of successful completion of the disposal of 31.5% equity interest in Xinjiang GCL New Energy Materials Technology Co., Ltd. (“Xinjiang GCL”)

In June 2019, Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd., a nonwholly owned subsidiary of the Company, entered into a share transfer agreement with Xuzhou Zhongping GCL Industrial Upgrading Investment Fund LLP, regarding the sale of its 31.5% equity interest in Xinjiang GCL to this investment fund. The repayment of the amount due from Xinjiang GCL of approximately RMB1,200 million and the receipt of the expected proceeds from this sale of RMB2,491 million as included in the working capital forecast is subject to the successful completion of this proposed transaction and the fulfilment of conditions as stipulated in the agreement in or before August 2019.

I-3 -

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Upon the completion of this proposed transaction, the Group will no longer control Xinjiang GCL, and accordingly, the Group’s remaining 38.5% equity interest in Xinjiang GCL will no longer be accounted for as a subsidiary to the Group and the Group will derecognise the assets and liabilities of Xinjiang GCL from its consolidated statement of financial position.

Notwithstanding the above, significant uncertainties exist as to whether the Group can achieve the plans and measures to generate adequate cash inflow as scheduled. The sufficiency of the Group’s working capital to satisfy its present requirements for at least the next twelve months from the date of this circular is dependent on the Group’s ability to generate adequate operating cash flows and financing cash flows through successful renewal of its bank borrowings upon expiries, compliance with the covenants under the borrowing agreements or obtaining waiver from the relevant banks if the Group is not able to satisfy any of the covenant requirements, successful securing of the financing from banks with repayment terms beyond twelve months from the date of this circular, and other short-term or long-term financing, as well as the successful implementation of financing plans and measures as described above.

4. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors are not aware of any material adverse change in the financial or trading position of the Company since 31 December 2018, being the date to which the latest published audited financial results of the Group were made up.

5. FINANCIAL AND TRADING PROSPECTS

For the year ended 31 December 2018, the Group recorded a total revenue of approximately RMB20,565 million, whilst the total revenue from continuing operations for the year ended 31 December 2017 (the “ Prior Year ”) was approximately RMB23,794 million. Gross profit for the year ended 31 December 2018 was approximately RMB5,032 million and gross profit margin was 24.5% whilst the gross profit and gross profit margin for Prior Year was approximately RMB8,198 million and 34.5% respectively. Loss attributable to owners of the Company for the year ended 31 December 2018 amounted to approximately RMB693 million as compared to the profit attributable to owners of the Company of RMB1,974 million for the Prior Year.

The Group’s solar material business belongs to the upstream of the solar supply chain, which supplies polysilicon and wafer to companies operating in the solar industry. Polysilicon is the primary raw material used in the solar wafer production. In addition, the Group also produces wafer by using polysilicon that are produced by the Group. In the solar industry supply chain, wafers are further processed by downstream manufacturers to produce solar cells and modules. As at 31 December 2018, the annual production capacity of polysilicon of the Group’s Xuzhou base remained at 70,000 MT. The production capacity of the Group’s Xinjiang polysilicon production base was on the rise as at 31 December 2018 and will reach 50,000 MT in the first quarter of 2019. As at 31 December 2018, the Group’s annual wafer production capacity remained at 30 GW.

The Group’s solar farm business manages and operates 371 MW solar farms. As at 31 December 2018, the Group’s solar farm business includes 18 MW of solar farms in the United States and 353 MW of solar farms in the PRC.

I-4 -

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The Group’s new energy business represents the business operations of GCL New Energy, which is principally engaged in the development, construction, operation and management of solar farms. As at 31 December 2018, the aggregated installed capacity of the 221 grid-connected solar farms of GNE Group increased by 22.0% to 7,309 MW.

The Group will continue to upgrade its existing diamond wire sawing technology in order to improve efficiency and reduce costs. Differentiating mono wafer ingot products will be developed according to market needs and products with a high cost performance will be introduced to the market with the help of the low-cost and high-quality Xinjiang intelligent production base as well as the mono wafer joint venture with Tianjin Zhonghuan Semiconductor Co., Ltd. The Group will steadily promote asset optimization in the Xuzhou production base and reduce its electricity cost with the aim of reinforcing its competitive strengths in anticipation of grid parity. The Group will also carry out resource sharing as well as platform, technological, capital and development co-operation through wider, stronger and deeper industry chain collaborations.

I-5 -

GENERAL INFORMATION

APPENDIX II

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 of the Company:

Name of Director/
chief executive
Zhu Gongshan
Zhu Zhanjun
Zhu Yufeng
Sun Wei
Yeung Man Chung, Charles
Jiang Wenwu
Zheng Xiongjiu
Ho Chung Tai, Raymond
Yip Tai Him

Number of Shares held
Number of
underlying
Shares held
Approximate
percentage
of issued
shares capital
Beneficiary
of a trust
Corporate
interests
Personal
interest
Totals
6,370,388,156
(note 1)
–
–
–
6,370,388,156
32.11%
–
–
3,400,000
2,719,359
(note 2)
6,119,359
0.03%
6,370,388,156
(note 1)
–
–
1,510,755
(note 2)
6,371,898,911
32.11%
–
–
5,723,000
1,712,189
(note 2)
7,435,189
0.04%
–
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%

II-1 -

GENERAL INFORMATION

APPENDIX II

Notes:

(1) An aggregate of 6,370,388,156 shares of the Company are collectively held by Highexcel Investments Limited, Happy Genius Holdings Limited and Get Famous Investments Limited, which are whollyowned by Golden Concord Group Limited, which in turn is wholly-owned 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 and Mr. Zhu Gongshan and his family (including Mr. Zhu Yufeng, a Director and the son of Mr. Zhu Gongshan) as beneficiaries.
(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 15 March 2016 to 28 March 2026 at an exercise price of HK$1.324 or HK$1.160.

Long position in the shares of the Company’s associated corporation, namely GCL New Energy, in which the Company indirectly holds approximately 62.28% issued shares:

Name of Director/
chief executive
Zhu Gongshan
Zhu Yufeng
Sun Wei
Yeung Man Chung, Charles
Zheng Xiongjiu

Number of shares of GCL New Energy held
Number of
underlying
Shares held
Approximate
percentage of
issued share
capital of GCL
New Energy
Beneficiary
of a trust
Corporate
interests
Personal
interests
Total
1,909,978,301
(note 1)
–
–
–
1,909,978,301
10.01%
1,909,978,301
(note 1)
–
–
3,523,100
(note 2)
1,913,504,401
10.03%
–
–
–
27,178,200
(note 2)
27,178,200
0.14%
–
–
–
15,099,000
(note 2)
15,099,000
0.08%
–
–
2,450,000
–
2,450,000
0.01%

Notes:

(1) 1,909,978,301 shares in GCL New Energy are beneficially owned by Dongsheng Photovoltaic Technology (Hong Kong) Limited (“ Dongsheng PV ”). Dongsheng PV is indirectly wholly-owned by GCL System Integration Technology Co., Ltd. (“ GCL System Integration ”) and an aggregate of over 40% of the issued shares in GCL System Integration is held by the Zhu Family Trust and Mr. Zhu Yufeng, an executive director of GCL New Energy and son of Mr. Zhu Gongshan, respectively.
(2) 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

II-2 -

GENERAL INFORMATION

APPENDIX II

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) Interests of substantial shareholders

As at the Latest Practicable Date, so far as is known to the Directors, the following persons (other than a Director or chief executive of the Company) had interest in the Shares of the Company as recorded in the registered required to be kept by the Company under section 336 of the Part XV of the SFO:

				Approximate
			Number of	percentage of
			shares/	issued share
		Capacity/nature	underlying	capital of the
Name	Note	of interest	shares	Company
Asia Pacific Energy	1	Interests in a controlled	6,370,388,156	32.11%
Fund Limited		corporation

Notes:

(1) An aggregate of 6,370,388,156 shares of the Company are collectively held by Highexcel Investments Limited, Happy Genius Holdings Limited and Get Famous Investments Limited, which are whollyowned by Golden Concord Group Limited, which in turn is wholly-owned 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 Gongshan and his family (including Mr. Zhu Yufeng, a Director and the son of Mr. Zhu Gongshan) as beneficiaries.
(2) The total number of ordinary shares of the Company in issue as at Latest Practicable Date is 19,841,049,207.

(c) Other disclosures under the SFO

Golden Concord Group Limited is indirectly wholly-owned by a discretionary trust with Credit Suisse Trust Limited as trustee for Mr. Zhu Gongshan and his family (including Mr. Zhu Yufeng as a Director of the Company) as beneficiaries. Mr. Zhu Gongshan is the settlor of the Zhu Family Trust. Mr. Yeung Man Chung, Charles is the Vice President of Golden Concord Group Limited, a company controlled by Zhu Family Trust.

Mr. Zhu Gongshan and Mr. Zhu Yufeng are directors of Golden Concord Group Limited, 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 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.

II-3 -

GENERAL INFORMATION

APPENDIX II

3. DIRECTORS’ SERVICE CONTRACTS

Each of the Independent non-executive Directors has entered into a service contract with the Company for a fixed term of three years and will be terminated by not less than three months’ notice in writing served by either party on the other. Upon the expiry of the notice period, the appointment will be terminated.

Save as disclosed above, 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 the entering into of the lease agreements with GCL System Integration Technology (Suzhou) Co., Ltd. (協鑫集成科技（蘇州）有限公司) and GCL Energy Engineering Co., Ltd. (協鑫能源工程有限公司) respectively, as disclosed in the announcement dated 28 February 2019, 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 2018, 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	錫林郭勒中能硅業有限公司	Intend to produce	Mr. Zhu Yufeng, through
	Xilingol Zhongneng	polysilicon ingot	companies controlled
	Silicon Co., Ltd.*	upon completion of	by him, holds 70%
	(Dormant and inactive)	construction	interest

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 2018, being the date to which the latest published and audited financial statements of the Group were made up.

II-4 -

GENERAL INFORMATION

APPENDIX II

7. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business) were entered into by members of the Group within two years immediately preceding the Latest Practicable Date which are or may be material:

(i) the subscription agreement dated 30 June 2017 between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. (江蘇中能硅業科技發展有限公司) and Tianjin Zhonghuan Semiconductor Co., Ltd. (天津中環半導體股份有限公司) in relation to Tianjin Zhonghuan Semiconductor Co., Ltd.’s subscription of shares in Xinjiang GCL New Energy Materials Technology Co., Ltd.* (新疆協鑫新能源材料科技有限公司) for a total consideration of RMB1,480 million;
(ii) the framework agreement dated 11 August 2017 between the Company and Tianjin Zhonghuan Semiconductor Co., Ltd.* (天津中環半導體股份有限公司) in relation to the collaboration in areas such as the manufacturing of polysilicon materials, monosilicon rods and monosilicon wafers;
(iii) the acquisition agreement dated 13 October 2017 between the Company, the China Force Enterprises Inc. and Shen Jing (沈靜) in relation to the Company’s acquisition of 29.55% of the issued share capital of the Lamtex Holdings Limited for a total consideration of HK$200 million;
(iv) the non-legally binding co-operation framework agreement dated 20 November 2017 entered into between GNE and Taiping Financial Holding Company Limited (太平金融控股有限公司) in relation to the establishment of an investment fund with a fund size of approximately HKD8,000 million for the purpose of investing in GNE by way of subscription of new shares and convertible bonds of GNE;
(v) the capital increase agreements dated 22 November 2017 entered into between Suzhou GCL New Energy Investment Co., Ltd. (蘇州協鑫新能源投資有限公司) and Nanjing GCL New Energy Development Co., Ltd. (南京協鑫新能源發展有限公司) with Sumin Ruineng Wuxi Equity Investment Partnership (Limited Partnership)* (蘇民睿能無錫股權投資合夥企業（有限合夥）in relation to the increase in an aggregate amount of RMB1,500,000,000 to Suzhou GCL New Energy Investment Co., Ltd.;
(vi) the capital increase agreement dated 28 November 2017 entered into between Suzhou GCL Technology Development Co., Ltd. (蘇州協鑫科技發展有限公司), Tianjin Zhonghuan Semiconductor Co., Ltd. (天津中環半導體股份有限公司) and Tianjin Zhonghuan Semiconductor Co., Ltd.* (天津中環半導體股份有限公司) in relation to the increase of registered share capital of Tianjin Zhonghuan Semiconductor Co., Ltd. by making a capital contribution, on a pro-rata basis, of RMB2,990,000,000;
(vii) the equity interest transfer agreement dated 28 November 2017 entered into between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. (江蘇中能硅業科技發展有限公司) and Tianjin Zhonghuan Semiconductor Co., Ltd. (天津中環半導體股份有限公司) in relation to Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.’s transfer of
II-5 -

APPENDIX II

GENERAL INFORMATION

20% equity interest in Xinjiang GCL New Energy Materials Technology Co., Ltd.* (新疆協鑫新能源材料科技有限公司) to Tianjin Zhonghuan Semiconductor Co., Ltd. in return for Tianjin Zhonghuan Semiconductor Co., Ltd. fully paying up the outstanding registered share capital at RMB300,000,000;

(viii) the subscription agreement dated 30 November 2017 entered into between GIC Investment Limited and Asia Energy Logistics Group Limited in relation to GIC Investment Limited’s subscription for HK$100,000,000 5.5% corporate bonds issued by Asia Energy Logistics Group Limited due on the third anniversary of the date of issuance;
(ix) the purchase agreement dated 23 January 2018 entered into between GNE certain non-PRC subsidiaries of the GNE’s Group providing guarantees, Merrill Lynch (Asia Pacific) Limited, Haitong International Securities Company Limited, Credit Suisse (Hong Kong) Limited, Standard Chartered Bank, CLSA Limited, Orient Securities (Hong Kong) Limited, VTB Capital plc and SPDB International Capital Limited in relation to the issue of US$500,000,000 7.1% senior notes due 2021;
(x) the subscription agreement dated 26 February 2018 between Stand Virtue Limited and Millennial Lithium Corp. in relation to the subscription for units in Millennial Lithium Corp. for an aggregate consideration of 5,726,745.50 Canadian dollars and a further maximum consideration of 652,053.50 Canadian dollars if the over-allotment option is exercised;
(xi) the non-legally binding investment agreement dated 10 April 2018 entered into between GCLPoly (Suzhou) New Energy Co., Ltd. (保利協鑫（蘇州）新能源有限公司) and Qujing Municipal People’s Government in PRC (曲靖市人民政府) and the Management Committee of Qujing Economic and Technological Development Zone (曲靖經濟技術開發區管理委員會) in relation to the establishment of a joint venture company for setting up a monocrystalline silicon manufacturing facility in Qujing, PRC;
(xii) the shareholders agreement dated 25 June 2018 entered into between GCL-Poly Investment I LP and Mitsui & Co., Ltd. in relation to the formation of a joint venture company to jointly develop investment opportunities;
(xiii) the share purchase agreement dated 28 December 2018 entered into between Suzhou GCL Photovoltaic Technologies Co., Ltd. (蘇州協鑫光伏科技有限公司) and Liaoning Huajun Asset Management Co., Ltd. (遼寧華君資產管理有限公司) in relation to the sale of the entire issued share capital of Suzhou Kezhun Photovoltaic Technologies Co., Ltd.* (蘇州客准光伏科技有限公司) for a purchase price of RMB850 million;
(xiv) the limited partnership agreement dated 12 April 2019 entered into between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.* (江蘇中能硅業科技發展有限公司) and a number of investors in relation to the establishment of an investment fund in the PRC with a total capital commitment of approximately RMB3.55 billion and the subscription of its interest therein;
II-6 -

APPENDIX II

GENERAL INFORMATION

(xv) the agreement dated 12 April 2019 entered into between GCL-Poly Suzhou New Energy Co., Ltd. (保利協鑫（蘇州）新能源有限公司), Leshan Municipal People’s Government (樂山市人民政府) and Shanghai Zhongping Guohao Assets Management Co., Ltd. (上海中平國瑀資產管理有限公司) to potentially set up an investment fund with an expected total capital commitment of about RMB5 billion;
(xvi) the capital increase agreement and supplemental agreement dated 30 May 2019 entered into among Suzhou GCL Technology Development Co., Ltd. (蘇州協鑫科技發展有限公司), Tianjin Zhonghuan Semiconductor Co., Ltd. (天津中環半導體股份有限公司), Inner Mongolia Zhonghuan GCL Solar Material Co., Ltd. (內蒙古中環協鑫光伏材料有限公司), Hohhot Investment Lingchuang Investment Fund (Limited Partnership) (呼和浩特市領創投資基金（有限合夥）) and Hohhot City Chengchi Phase II Industrial Development Fund Investment Center (Limited Partnership) (呼和浩特市城池二期產業發展基金投資中心（有限合夥）) in relation to the capital contribution with an aggregated total of RMB800,000,000 in the registered capital and capital reserve of Inner Mongolia Zhonghuan GCL Solar Material Co., Ltd. (內蒙古中環協鑫光伏材料有限公司);
(xvii) the cooperation agreements dated 31 May 2019 entered into between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. (江蘇中能硅業科技發展有限公司) (an indirect subsidiary of the Company), and other parties: (a) Leshan Gaoxin Investment Development (Group) Limited (樂山高新投資發展（集團）有限公司), (b) Suzhou Zeye Investment Co., Ltd.[] (蘇州澤業投資有限公司) , (c) Zeye New Energy Holdings Limited (澤業新能源控股有限公司) and (d) Shanghai Zhongping Guohao Assets Management Co., Ltd. (上海中平國瑀資產管理有限公司) , in relation to the establishment of Leshan Polysilicon Photovoltaic Information Industry Investment Fund (樂山多晶硅光電信息產業基金) with the total capital commitment intended to be between RMB4 billion and RMB4.5 billion, of which Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.* (江蘇中能硅業科技發展有限公司) intends to contribute RMB500 million;
(xviii) the cooperation intent agreement dated 3 June 2019 entered into between Elite Time Global Limited, a wholly owned subsidiary of the Company and China Hua Neng Group Hong Kong Limited, in relation to the possible sale of 9,727,594,875 ordinary shares in the share capital of GNE, representing approximately 51% of the entire issued share capital of GNE as at 4 June 2019;
(xix) the placement agreement dated 10 June 2019 entered into between the Company and UBS AG Hong Kong Branch, in relation to the placing of 1,511,000,000 new ordinary shares under the general mandate, with proceeds amounting to approximately HK$680 million; and
(xx) the share purchase agreement dated 26 June 2019 enter into between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. (江蘇中能硅業科技發展有限公司), an indirect non-wholly owned subsidiary of the Company, Xuzhou Zhongping GCL Industrial Upgrading Equity Investment Fund LLP (徐州中平協鑫產業升級股權投資基金（有限合夥）) and Xinjiang GCL New Energy Materials Technology Co., Ltd.* (新疆協鑫新能源材料科技有限公司) in relation to the sale of the 31.5% of the equity interests in Xinjiang GCL New Energy Materials Technology Co., Ltd. to Xuzhou Zhongping GCL Industrial Upgrading Equity Investment Fund LLP.
II-7 -

GENERAL INFORMATION

APPENDIX II

8. CLAIMS AND LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation, arbitration or claim of material importance and no litigation, arbitration or claim of material importance was known to the Directors to be pending or threatened against any member of the Group.

9. GENERAL

(i) The company secretary of the Company is Mr. Yeung Man Chung, Charles, who is a member of The Hong Kong Institute of Certified Public Accountants and The Australian Society of Certified Practising Accountants.
(ii) In case of inconsistencies, the English texts of this circular shall prevail over the Chinese texts thereof.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at Unit 1703B-1706, Level 17, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong during normal business hours on any business day for a period of 14 days from the date of this circular:

(a) the memorandum of association and bye-laws of the Company;
(b) the annual reports of the Company for each of the financial years ended 31 December 2016, 2017 and 2018;
(c) the material contracts referred to in the section headed “Material Contracts” in this appendix;
(d) the Sale and Purchase Agreements;
(e) the Share Pledge Agreements;
(f) the OMM Agreements; and
(g) this circular.
II-8 -

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [111 x 54] intentionally omitted <==

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 Hongkong Hotel, 3 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong on Friday, 19 July at 11:00 a.m. for the purpose of considering and, if thought fit, approving the following resolution as an ordinary resolution of the Company. Unless otherwise indicated, capitalised terms used in this notice and the following resolution shall have the same meanings as those defined in the circular of the Company dated 28 June 2019.

The following resolution will be considered and, if thought fit, approved by the Shareholders, with or without amendments, at the EGM:

ORDINARY RESOLUTION

“ THAT :

(a) the series of seven share purchase agreements dated 22 May 2019 entered into between Suzhou GCL New Energy Investment Co., Ltd. (蘇州協鑫新能源投資有限公司) as seller (the “ Seller ”) and Shanghai Rongyao New Energy Co., Ltd. (上海榕耀新能源有限公司) as purchaser (the “ Purchaser ”) in relation to:
(i) sale and purchases of 70% of the equity interests in Shanxi GCL New Energy Technologies Co., Ltd. (山西協鑫新能源科技有限公司), Fenxi County GCL Photovoltaic Co., Ltd. (汾西縣協鑫光伏電力有限公司), Ruicheng County GCL Photovoltaic Co., Ltd. (芮城縣協鑫光伏電力有限公司), Yu County Jinyang New Energy Power Generation Co., Ltd. (盂縣晉陽新能源發電有限公司), Yu County GCL Photovoltaic Co., Ltd. (盂縣協鑫光伏電力有限公司), Hanneng Guangping County Photovoltaic Development Co., Ltd. (邯能廣平縣光伏電力開發有限公司) and Hebei GCL New Energy Co., Ltd. (河北協鑫新能源有限公司) (the “ Target Companies ”) (the “ Sale Shares ”) together with 70% of the outstanding shareholder’s loan owed from the Target Companies to the Seller (the “ Disposals* ”); and
EGM-1 -

NOTICE OF EXTRAORDINARY GENERAL MEETING

(ii) grant of put options by the Seller to the Purchaser and/or the Target Companies, pursuant to which the Purchaser and/or the Target Companies are entitled to, upon the occurrence of certain specified events, request the Seller to repurchase the Sale Shares and/or the entire equity interests of any subsidiary of the Target Companies and the relevant shareholder’s loans outstanding at the time (the “ Put Options ”),

be and is hereby approved, ratified and confirmed; and

(b) any director of the Company be and is hereby authorised for and on behalf of the Company to execute (including affixing the seal of the Company in accordance with the articles of association of the Company to) all such documents and do all such acts and things as he/she may in his/her absolute discretion consider to be necessary, desirable, appropriate or expedient to implement and/or to give effect to the Disposals and the Put Options and the transactions contemplated under the Share Purchase Agreements and all matters incidental or ancillary thereto.”

By order of the Board GCL-Poly Energy Holdings Limited 保利協鑫能源控股有限公司 Zhu Gongshan Chairman

Hong Kong, 28 June 2019

For identification purpose only

Notes:

(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.
(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 branch share registrar and transfer office, Tricor Investor Services Limited, not less than 48 hours before the time fixed for holding the EGM or any adjournment thereof. The address of Tricor Investor Services Limited is currently Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong. With effect from 11 July 2019, Tricor Investor Services Limited will change its address to Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(3) The register of members of the Company will be closed from Tuesday, 16 July 2019 to Friday, 19 July 2019, both days inclusive, during which period no transfer of shares will be registered, in order to determine the entitlement to attend and vote at the EGM. In order to qualify for the right to attend and vote at the EGM to be held on Friday, 19 July, all transfers, accompanied by the relevant share certificates, must be lodged for registration with the Company’s Hong Kong branch share registrar and transfer office, Tricor Investor Services Limited, no later than 4:30 p.m., Monday, 15 July 2019. The address of Tricor Investor Services Limited is currently Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong. With effect from 11 July 2019, Tricor Investor Services Limited will change its address to Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(4) Completion and delivery 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.
EGM-2 -

NOTICE OF EXTRAORDINARY GENERAL MEETING

(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.
(6) If Typhoon Signal No. 8 or above, or a “black” rainstorm warning is in effect any time after 8:00 a.m. on the date of the EGM, the EGM will be postponed. Shareholders may visit the website of the Company at www.gcl-poly.com.hk for details of the postponement and alternative meeting arrangement.
EGM-3 -

AI assistant

GCL Technology Holdings Limited — Proxy Solicitation & Information Statement 2019

50888_rns_2019-06-27_585dd545-de9e-429a-af4e-0e42858c9cfc.pdf

GCL-POLY ENERGY HOLDINGS LIMITED 保利協鑫能源控股有限公司

(1) DISCLOSEABLE TRANSACTION DISPOSAL OF 70% EQUITY INTEREST IN SUBSIDIARIES (2) POSSIBLE MAJOR TRANSACTION GRANT OF PUT OPTION

AND NOTICE OF EXTRAORDINARY GENERAL MEETING

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

GCL-POLY ENERGY HOLDINGS LIMITED 保利協鑫能源控股有限公司

Principal place of

To the Shareholders

(1) DISCLOSEABLE TRANSACTION DISPOSAL OF 70% EQUITY INTEREST IN SUBSIDIARIES (2) POSSIBLE MAJOR TRANSACTION GRANT OF PUT OPTION

1. INTRODUCTION

2. THE SHARE PURCHASE AGREEMENT

Date

Parties

Assets to be sold

LETTER FROM THE BOARD

Consideration

Basis of the Consideration

LETTER FROM THE BOARD

Payment arrangements

Payment of the Share Price

LETTER FROM THE BOARD

Payment of the Shareholder’s Loan Price

LETTER FROM THE BOARD

Effective date and conditions

Conditions precedent

Closing

Closing Audit Report and profit-sharing arrangement

Post-closing management of the Target Companies

Security

Grant of Put Options

(a) Repurchase of Project Company

(b) Repurchase of Target Company

(c) Repurchase price for (a) and (b)

3. THE OMM AGREEMENTS

4. INFORMATION ON THE GROUP

The Group

The Seller

5. INFORMATION ON THE PURCHASER

6. INFORMATION ON THE TARGET COMPANIES

Share Purchase Agreements Information on the Target Companies

LETTER FROM THE BOARD

LETTER FROM THE BOARD

LETTER FROM THE BOARD

7. FINANCIAL IMPACT OF THE TRANSACTIONS

8. USE OF PROCEEDS FROM THE TRANSACTIONS

9. REASONS AND BENEFITS OF THE TRANSACTIONS

10. LISTING RULES IMPLICATIONS

LETTER FROM THE BOARD

11. THE EGM

12. CLOSURE OF REGISTER OF MEMBERS

LETTER FROM THE BOARD

13. RECOMMENDATION

14. ADDITIONAL INFORMATION

Zhu Gongshan

1. FINANCIAL INFORMATION OF THE GROUP

2. STATEMENT OF INDEBTEDNESS AND CONTINGENT LIABILITIES

APPENDIX I

3. WORKING CAPITAL STATEMENT

i. Successful implementation of measures of GNE Group

ii. Likelihood of successful completion of the disposal of 51% equity interest in GNE

iii. Likelihood of successful completion of the disposal of 31.5% equity interest in Xinjiang GCL New Energy Materials Technology Co., Ltd. (“Xinjiang GCL”)

4. MATERIAL ADVERSE CHANGE

5. FINANCIAL AND TRADING PROSPECTS

1. RESPONSIBILITY STATEMENT

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

(b) Interests of substantial shareholders

(c) Other disclosures under the SFO

3. DIRECTORS’ SERVICE CONTRACTS

4. DIRECTORS’ INTERESTS IN ASSETS OR CONTRACTS AND OTHER INTERESTS

5. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

6. MATERIAL ADVERSE CHANGE

GCL Technology Holdings Limited Proxy Solicitation & Information Statement 2019