GCL Technology Holdings Limited - Proxy Solicitation & Information Statement 2020

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.

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(1) MAJOR TRANSACTION DISPOSAL OF SUBSIDIARIES AND (2) 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 8 to 27 of this circular.

A notice convening the EGM of the Company to be held at Strategy II–III, Level 8, W Hong Kong, 1 Austin Road West, Kowloon Station, Kowloon, Hong Kong on Friday, 15 January 2021 at 11: 30 a.m. is set out on pages EGM-1 to EGM-3 of this circular.

Irrespective of whether you are able to attend the EGM, 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 EGM or any adjournment thereof. The address of Tricor Investor Services Limited is 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 EGM or any adjournment thereof should you so wish and in such event, the proxy form shall be deemed to be revoked.

28 December 2020

PRECAUTIONARY MEASURES FOR THE EGM

Please see pages 1 to 2 of this circular for precautionary measures being taken to prevent and control the spread of COVID-19 at the EGM, including without limitation:

. compulsory body temperature checks;
. compulsory wearing of surgical face masks (please bring your own mask);
. no refreshment will be served; and
. no souvenirs will be distributed.

Any person who does not comply with the above precautionary measures may be denied entry into the EGM venue. The Company will require all attendees to wear surgical face masks before they are permitted to attend, and during their attendance of the EGM at all times, and reminds the Shareholders that they may appoint the chairman of the EGM as their proxy to vote on the relevant resolutions at the EGM as an alternative to attending the EGM in person.

– i –

	Page
PRECAUTIONARY MEASURES FOR THE EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
APPENDIX I — FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . .	I-1
APPENDIX II — GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . .	EGM-1

– ii –

PRECAUTIONARY MEASURES FOR THE EGM

In view of the ongoing COVID-19 epidemic and recent guidelines for prevention and control of its spread, the Company will implement the following precautionary measures at the EGM to protect the Shareholders, staff and other stakeholders who attend the EGM from the risk of infection:

(i) compulsory body temperature checks will be conducted on every Shareholder, proxy and other attendee. Any person with a body temperature of 37 degrees Celsius or higher may be denied entry into the EGM venue or be required to leave the EGM venue;
(ii) the Company will require all attendees to wear surgical face masks before they are permitted to attend, and during their attendance of the EGM at all times, and to maintain a safe distance between seats (please bring your own mask);
(iii) no refreshment will be served at the EGM;
(iv) no souvenirs will be distributed at the EGM; and
(v) no guest will be allowed to enter the EGM venue if he/she is wearing quarantine wristband issued by the Government of Hong Kong.

Any person who does not comply with above requirements may be denied entry into the EGM venue or be required to leave the EGM venue. To the extent permitted under law, the Company reserves the right to deny entry into the EGM venue or require any person to leave the EGM venue in order to ensure the safety of other attendees at the EGM. In our case, denied entry to the EGM venue also means that person will not be allowed to attend the EGM.

In the interest of all stakeholders’ health and safety and in accordance with recent guidelines for prevention and control of the spread of COVID-19, the Company reminds all Shareholders that physical attendance in person at the EGM is not necessary for the purpose of exercising voting rights. As an alternative, the Shareholders may complete the proxy forms and appoint the chairman of the EGM as their proxy to vote on the relevant resolutions at the EGM instead of attending the EGM in person.

The proxy forms were despatched to the Shareholders together with this circular, and can otherwise be downloaded from the websites of the Company at http://www.gcl-poly.com.hk or the Stock Exchange at www.hkexnews.hk. If you are not a registered Shareholder (i.e. if your Shares are held via banks, brokers, custodians or Hong Kong Securities Clearing Company Limited), you should consult directly with your banks, brokers or custodians (as the case may be) to assist you in the appointment of proxy.

– 1 –

PRECAUTIONARY MEASURES FOR THE EGM

If you have any questions relating to the EGM, please contact the Company’s Hong Kong branch share registrar and transfer office, Tricor Investor Services Limited, via the following:

Address : Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong Email : [email protected] Telephone : +852 2980 1333 Fax : +852 2810 8185

Subject to the development of COVID-19, the Company may implement further precautionary measures and may issue further announcements on such measures as appropriate.

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DEFINITIONS

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

‘‘Anhui GCL New Anhui GCL New Energy Investment Co., Ltd.* (安徽協鑫新能源 Energy’’ 投資有限公司), a company established in the PRC with limited liability and an indirect subsidiary of the Company
‘‘Announcement’’ the joint announcement of GNE and the Company dated 22 November 2020 in relation to the Second Phase Share Purchase Agreements
‘‘Board’’ the board of the 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 the PRC
‘‘Bye-laws’’ the Bye-laws of the Company, as amended from time to time
‘‘Closing Audit Report’’ closing audit report prepared by an auditing agency appointed by the respective Seller and the Purchaser to audit the financials of the Target Companies from the Reference Date to the Closing Date in accordance with the Second Phase Share Purchase Agreements
‘‘Closing Date’’ the date of issuance as stated on the new business certificate of the Target Company(ies) upon the completion of the Registration Procedures
‘‘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 ordinary 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
‘‘Conditions Precedent’’ the conditions under the section ‘‘Conditions Precedent’’ in this circular
‘‘connected persons’’ has the same meaning ascribed to it under the Listing Rules
‘‘Consideration’’ the consideration for the Transactions
‘‘Dangshan GCL’’ Dangshan GCL Solar Power Co., Ltd. (碭山協鑫光伏電力有限公司), a company established in the PRC with limited liability, which is wholly-owned by Anhui GCL New Energy and an indirect subsidiary of the Company

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DEFINITIONS

‘‘Dangshan GCL Share an equity transfer agreement dated 22 November 2020 entered Purchase Agreement’’ into between Anhui GCL New Energy and the Purchaser in relation to the sale of the 90% equity interest in Dangshan GCL
‘‘Director(s)’’

the director(s) of the Company

‘‘Disposals’’ the First Phase Disposals and the Second Phase Disposals
‘‘EGM’’ the extraordinary general meeting of the Company to be convened to consider and, if thought fit, approve the Transactions, the entering into and performance of obligations under the Second Phase Share Purchase Agreements
‘‘First Phase Disposals’’ the proposed disposals of (i) 90% of equity interest in Suzhou GCL Solar Power Co., Ltd. (宿州協鑫光伏電力有限公司), Huaibei Xinneng Solar Power Co., Ltd. (淮北鑫能光伏電力有限公司), Hefei Jiannan Electric Power Co., Ltd. (合肥建南電力有限公司) and Hefei Jiuyang New Energy Co., Ltd. (合肥久陽新能源有限公司); and (ii) 67% equity interest in Dangshan Xinneng Solar Power Co., Ltd.* (碭山鑫能光伏電力有限公司) by the Sellers to the Purchaser as contemplated under the First Phase Share Purchase Agreements
‘‘First Phase Share Purchase Agreements’’
the series of five share purchase agreements dated 16 November 2020 entered into between the respective Seller and the Purchaser, as detailed in the joint announcement of GNE and the Company dated 16 November 2020 in relation to the First Phase Disposals
‘‘Funan GCL’’ Funan GCL Solar Power Co., Ltd.* (阜南協鑫光伏電力有限公司), a company established in the PRC with limited liability, which is wholly-owned by Suzhou GCL New Energy and an indirect subsidiary of the Company
‘‘Funan GCL Share an equity transfer agreement dated 22 November 2020 entered Purchase Agreement’’ into between Suzhou GCL New Energy and the Purchaser in relation to the sale of the 90% equity interest in Funan GCL
‘‘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. As at the Latest Practicable Date, the Company is interested in approximately 62.28% of the issued share capital of GNE
‘‘GNE Board’’ the board of GNE Directors
‘‘GNE Directors’’ the directors of GNE

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DEFINITIONS

‘‘GNE Group’’ GNE and its subsidiaries
‘‘GNE Shareholders’’ the shareholders of GNE
‘‘Group’’

the Company and its subsidiaries

‘‘Hefei Xinren’’ Hefei Xinren Solar Power Co., Ltd.* (合肥鑫仁光伏電力有限公司), a company established in the PRC with limited liability, which is wholly-owned by Anhui GCL New Energy and an indirect subsidiary of the Company
‘‘Hefei Xinren Share an equity transfer agreement dated 22 November 2020 entered Purchase Agreement’’ into between Anhui GCL New Energy and the Purchaser in relation to the sale of the 90% equity interest in Hefei Xinren
‘‘Hong Kong’’
Hong Kong Special Administrative Region of the PRC
‘‘Latest Practicable Date’’
22 December 2020, 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
‘‘MW’’
megawatt(s)
‘‘National Subsidy National Renewable Energy Tariff Surcharge Subsidy Catalogue Catalogue’’ (可再生能源電價附加資金補助目錄) under the Renewable Energy Law (中華人民共和國可再生能源法) promulgated on 28 February 2005 and implemented on 1 January 2006
‘‘National Subsidy List’’ Renewable Energy Tariff Subsidy List (可再生能源發電補助項目清單)
‘‘Net Payable Amount’’ the amount equivalent to the positive difference between total amount payable by the respective Target Company to the respective Seller and its affiliates and the total amount receivable by the respective Target Company from the respective Seller and its affiliates
‘‘Operational Solar the operational solar power plant project(s) of the Target Power Plant Companies Project(s)’’
‘‘PRC’’ 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

– 5 –

DEFINITIONS

‘‘Purchaser’’ Xuzhou State Investment & Environmental Protection Energy Co., Ltd.* (徐州國投環保能源有限公司), a company established in the PRC with limited liability and an independent third party to the Company ‘‘Reference Date’’ 31 July 2020 ‘‘Registered Solar operational Solar Power Plant Projects which are registered in Power Plant Projects’’ the 7th batch of the National Subsidy Catalogue and 1st batch of the National Subsidy List

‘‘Registration the registration procedures in respect of the change of Procedures’’ shareholder of each of the Target Companies and other relevant filing procedures in respect of the Transactions in the PRC ‘‘Remaining Group’’ the Group after completion of the Second Phase Disposals ‘‘RMB’’ Renminbi, the lawful currency of the PRC ‘‘Sale Shares’’ the 90% equity interest in each of Dangshan GCL, Funan GCL, Hefei Xinren and Tianchang GCL and the 50% equity interest in Taihu Xinneng held by the respective Seller

‘‘Second Phase the proposed disposals of the Sale Shares by the Sellers to the Disposals’’ Purchaser as contemplated under the Second Phase Share Purchase Agreements ‘‘Second Phase Share Dangshan GCL Share Purchase Agreement, Taihu Xinneng Purchase Share Purchase Agreement, Funan GCL Share Purchase Agreements’’ Agreement, Hefei Xinren Share Purchase Agreement and Tianchang GCL Share Purchase Agreement ‘‘Seller(s)’’ Anhui GCL New Energy and Suzhou GCL New Energy ‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) ‘‘Share(s)’’ ordinary share(s) of one-two-hundred-fortieth (1./240) of a Hong Kong dollar each (equivalent to HK$0.00416) in the share capital of GNE ‘‘Shareholders’’ the shareholders of the Company ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘subsidiaries’’ has the same meaning ascribed to it under the Listing Rules

– 6 –

DEFINITIONS

‘‘Suzhou GCL New Suzhou GCL New Energy Investment Co., Ltd. (蘇州協鑫新能源 Energy’’ 投資有限公司), a company established in the PRC with limited liability and an indirect subsidiary of the Company
‘‘Taihu Xinneng’’ Taihu Xinneng Solar Power Co., Ltd.* (太湖鑫能光伏電力有限公司), a company established in the PRC with limited liability, which is wholly-owned by Anhui GCL New Energy and an indirect subsidiary of the Company
‘‘Taihu Xinneng Share an equity transfer agreement dated 22 November 2020 entered Purchase Agreement’’ into between Anhui GCL New Energy and the Purchaser in relation to the sale of the 50% equity interest in Taihu Xinneng
‘‘Target Company(ies)’’ the five target companies being the subject of the Second Phase Disposals, details of which can be found in the headed ‘‘Information on the Target Companies’’ of this circular
‘‘Tianchang GCL’’
Tianchang City GCL Solar Power Co., Ltd.* (天長市協鑫光伏電力有限公司), a company established in the PRC with limited liability, which is wholly-owned by Suzhou GCL New Energy and an indirect subsidiary of the Company
‘‘Tianchang GCL Share an equity transfer agreement dated 22 November 2020 entered Purchase Agreement’’ into between Suzhou GCL New Energy and the Purchaser in relation to the sale of the 90% equity interest in Tianchang GCL
‘‘Transactions’’
the transactions contemplated under the Second Phase Share Purchase Agreements
‘‘Transition Period’’
the period between the Reference Date and the Closing Date
‘‘%’’ 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.

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LETTER FROM THE BOARD

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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. Ho Chung Tai, Raymond 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 December 2020

To the Shareholders

Dear Sir or Madam,

(1) MAJOR TRANSACTION DISPOSAL OF SUBSIDIARIES AND

(2) NOTICE OF EXTRAORDINARY GENERAL MEETING

1. INTRODUCTION

We refer to the Announcement published on 22 November 2020. As disclosed in the Announcement, on 22 November 2020, Anhui GCL New Energy and Suzhou GCL New Energy (as the sellers) and Xuzhou State Investment & Environmental Protection Energy Co., Ltd.* (徐州國投環保能源有限公司) (as the purchaser) entered into the Second Phase Share Purchase Agreements. Pursuant to the Second Phase Share Purchase Agreements, the

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LETTER FROM THE BOARD

respective Seller agreed to, among other things, sell 90% equity interest in each of Dangshan GCL, Funan GCL, Hefei Xinren and Tianchang GCL and 50% equity interest in Taihu Xinneng to the Purchaser.

2. THE SECOND PHASE SHARE PURCHASE AGREEMENTS

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

Date

22 November 2020

Parties

(i) The Sellers: (a) Anhui GCL New Energy Investment Co., Ltd.* (安徽協鑫新能源投資有限公司)
(b) Suzhou GCL New Energy Investment Co., Ltd.* (蘇州協鑫新能源投資有限公司)
(ii) The Purchaser: (a) Xuzhou State Investment & Environmental Protection Energy Co., Ltd.* (徐州國投環保能源有限公司)

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Purchaser and its ultimate beneficial owner(s) are third parties independent of the Company and GNE and their respective connected persons.

Assets to be sold

The Sale Shares will be sold by the respective Seller to the Purchaser, being (i) 90% equity interest in each of Dangshan GCL, Funan GCL, Hefei Xinren and Tianchang GCL; and (ii) 50% equity interest in Taihu Xinneng.

The Target Companies own 7 operational solar power plants in Anhui province in the PRC with an aggregate grid-connected capacity of approximately 217MW.

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LETTER FROM THE BOARD

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

Second Phase Share Purchase Agreements Target Companies I Dangshan GCL Solar Power Co., Ltd. (碭山協鑫光伏電力有限公司) II Taihu Xinneng Solar Power Co., Ltd. (太湖鑫能光伏電力有限公司) III Funan GCL Solar Power Co., Ltd. (阜南協鑫光伏電力有限公司) IV Hefei Xinren Solar Power Co., Ltd. (合肥鑫仁光伏電力有限公司) V Tianchang City GCL Solar Power Co., Ltd.* (天長市協鑫光伏電力有限公司)

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

Consideration

The aggregate Consideration under the Second Phase Share Purchase Agreements is RMB312,728,221.

The table below sets out the Consideration of each of the Target Companies:

Second Phase Share Purchase Agreements Target Companies I Dangshan GCL II Taihu Xinneng III Funan GCL IV Hefei Xinren V Tianchang GCL Total	Consideration RMB 36,100,000 23,778,908 183,469,028 14,430,285 54,950,000
	312,728,221

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LETTER FROM THE BOARD

Basis of the Consideration

The Consideration was determined after arm’s length negotiations between the Sellers and the Purchaser, taking into account of, among other things:

(i) the net asset value of each of the Target Companies as at the Reference Date (i.e. 31 July 2020);
(ii) the profitability of the Target Companies for the financial years ended 31 December 2019 and 31 December 2018, details of which can be found in the section headed ‘‘Information on the Target Companies’’ of this circular;
(iii) the reasons for the Second Phase Disposals as discussed in the paragraph headed ‘‘Reasons and Benefits of the Transactions’’ below;
(iv) the cash flow position of each of the Target Companies as at the Reference Date. The aggregate net cash outflow (excluding financing of shareholders’ loan) of the Target Companies for the seven months ended 30 July 2020 amounted to approximately RMB44,907,849; and
(v) the ability of the Target Companies to collect outstanding receivables from the PRC government. As at the date of the Announcement, four out of five of the Operational Solar Power Plant Projects were Registered Solar Power Plant Projects and were entitled to receive the national subsidy for operating such Operational Solar Power Plant Projects. As at the Latest Practicable Date, (i) the remaining Operational Solar Power Plant Project operated by Hefei Xinren was awaiting to undergo the approval and registration process to be included in the National Subsidy List; and (ii) the timing for the completion of the approval and registration process of the remaining Operational Solar Power Plant Project operated by Hefei Xinren to be included in the National Subsidy List and the conditions to be fulfilled before the completion of the approval and registration process are uncertain and are based on the policies in relation to the National Subsidy List as announced and implemented by the relevant government authorities in the PRC from time to time. As at the Reference Date, the total balance of national subsidy receivable by the Target Companies was approximately RMB528,998,698, all of which have been recognised as revenue and trade receivables in the financial statements of the Target Companies as at the Reference Date.

For the avoidance of doubt, the Sellers are not entitled to receive other benefits from the Purchaser such as dividend income from the Target Companies.

Considering the factors set out above, and the reasons set out in the section ‘‘Reasons and Benefits of the Transactions’’ set out below, the Directors and the GNE Directors are of the view that the Consideration is fair and reasonable.

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LETTER FROM THE BOARD

Payment arrangements of the Consideration

The aggregate Consideration under the Second Phase Share Purchase Agreements shall be paid by the Purchaser to the respective Seller in cash according to the manner set out below:

Second Phase Share	Purchase	First		Second		Third
Agreements		Instalment		Instalment		Instalment
		RMB		RMB		RMB
Dangshan GCL		7,220,000		27,080,000		1,800,000
Taihu Xinneng		4,755,782		16,983,126		2,040,000
Funan GCL		36,693,805	146,325,223			450,000
Hefei Xinren		2,886,057		11,494,228		50,000
Tianchang GCL		10,990,000		43,470,000		490,000
Total		62,545,644	245,352,577			4,830,000
First instalment:	The Purchaser shall pay 20% of the Consideration (the
	‘‘First Instalment’’) amounted			to RMB62,545,644 to the
	respective	Seller within	10	Business	Days	after the
	fulfilment	of or waiver	by the Purchaser of the
	following	conditions:

(i) obtaining the written consent from each of the creditors of the Target Companies in relation to the Second Phase Disposals;
(ii) obtaining the consent from the pledgees to the release of all pledges over the equity interest of each of the Target Companies; and
(iii) the Purchaser fulfilling the request of the relevant financial institutions to provide transitional guarantee (if any).

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LETTER FROM THE BOARD

Second instalment: The Purchaser shall pay RMB245,352,577 of the Consideration (the ‘‘Second Instalment’’) to the respective Seller within 7 Business Days after the fulfilment of the following conditions:

(i) the completion of the Registration Procedures within 7 to 15 Business Days after the receipt of the First Instalment;
(ii) the handover of the management of each of the Target Companies in accordance with the terms and conditions of the Second Phase Share Purchase Agreements; and
(iii) the execution of a transfer confirmation in relation to the handover of corporate documents in connection to the Transactions.

Third instalment: The Purchaser shall pay RMB4,830,000 of the remaining Consideration (the ‘‘Third Instalment’’) to the respective Seller within 90 days after the Closing.

Net Payable Amount

The table below sets out the Net Payable Amount of each of the Target Companies as at the Reference Date:

Second Phase Share Purchase Agreements Target Companies I Dangshan GCL II Taihu Xinneng III Funan GCL IV Hefei Xinren V Tianchang GCL Total	Net Payable Amount RMB 98,212,755 33,366,010 371,652,827 1,850,863 169,303,239
	674,385,694

According to the audit report prepared by a PRC audit firm, the total Net Payable Amount payable by Dangshan GCL, Taihu Xinneng, Funan GCL, Hefei Xinren and Tianchang GCL to the respective Sellers and their respective affiliates as at the Reference Date was approximately RMB674,385,694.

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LETTER FROM THE BOARD

The Purchaser undertakes to, or procures the Target Companies to, make full payment of the Net Payable Amount as at the Reference Date and their respective interests accrued to the Sellers within 90 day after the Closing. Subject to the progress of the Target Companies in refinancing its existing debts, the Target Companies shall make an initial payment of the Net Payable Amount as at the Reference Date of RMB78,303,468 to the Sellers within 30 days after the Closing Date. In the event of late payment, the Purchaser or the respective Target Company shall pay a default interest at an interest rate of 6% to the respective Seller. The interest rate of 6% was determined with reference to the current applicable loan prime rate promulgated by the People’s Bank of China for a term of over five years subject to adjustments after arm’s length negotiation between the Sellers and the Purchaser. The Directors and the GNE Directors believe and consider that such interest rate is fair and reasonable.

Transition Period Arrangement

The parties acknowledged in principle that the Transition Period shall not exceed 120 days. The profit and loss incurred by the Target Companies within 120 days from the Reference Date (the ‘‘Cut-off Date’’) shall be accrued for the benefit of or borne by the Sellers and the Purchaser based on their respective equity interest held in the Target Companies after the Closing. In the event that the Closing fails to take place within the Cut-off Date, the Sellers agree to grant a grace period of 90 days. If the Closing is not completed before the expiry of the grace period, the Sellers are entitled to the entire profit of the Target Companies for the number of days which the Closing was delayed (i.e. from the 211th day from the Reference Date up to the Closing Date). The calculation of the profit and loss shall be determined by the Closing Audit Report.

If the Sellers and their respective affiliates continue to provide any loans or advances to the Target Companies during the Transition Period, the Purchaser shall repay the Net Payable Amount incurred during the Transition Period (on a dollar-fordollar basis) to the Sellers and their affiliates within 7 Business Days after completion of the Closing Audit Report. In the event of late payment, the Purchaser shall pay a default interest at an interest rate of 6% to the Sellers. The interest rate of 6% was determined with reference to the current applicable loan prime rate promulgated by the People’s Bank of China for a term of over five years subject to adjustments after arm’s length negotiation between the Sellers and the Purchaser. The Directors and the GNE Directors believe and consider that such interest rate is fair and reasonable.

Other Undertakings

The Sellers and the Purchaser agreed to be subject to the following undertakings:

(i) (applicable to all Target Companies except Hefei Xinren) the respective Seller shall be responsible for all tax payment including but not limited to farmland occupation tax, land use tax and the related tax expenses incurred by or subject to payment by the relevant Target Company prior to the Reference Date based on the duration for which the relevant Seller owns the relevant Target Company;

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LETTER FROM THE BOARD

(ii) (applicable to all Target Companies) in the event that the contingent liabilities incurred by the Target Companies prior to Reference Date become actual liabilities payable after the Closing, such amount of contingent liabilities shall be paid by the relevant Seller; and
(iii) (applicable to all Target Companies except Taihu Xinneng) the Purchaser shall undertake to allow the respective Seller to appoint one director to the board of directors of each of the Target Companies except Taihu Xinneng.

Conditions Precedent

The Closing under each of the Second Phase Share Purchase Agreements is subject to the fulfilment or waiver of the following Conditions Precedent:

(i) save for the legal encumbrances as set out in the Second Phase Share Purchase Agreements (including but not limited to the pledges over the equity interest, income rights and certain equipment of the Target Companies (as the case may be)), the Target Companies have no other actual or potential legal encumbrances. In the event of the existence of any undisclosed legal encumbrances, such legal encumbrances shall be removed, waived in writing or otherwise settled in a manner that would not affect the Transactions;
(ii) the parties have obtained all the necessary approvals, consents and authorisations in relation to the Transactions. The execution of documents in relation to the Transactions has not violated any provisions of the applicable laws and regulations, articles of association, contracts and any agreements entered into with third parties or relevant government authorities;
(iii) the Target Companies have normal business operation. During the Transition Period, (a) there is no adverse change to the business operation, financial condition and assets of the Target Companies; (b) there is no change in laws and regulations which may adversely affect the Transactions, the legality of the Transactions or the operation of the Target Companies; and (c) there is no litigation, judicial procedures, administrative procedures and other dispute resolution procedures that may affect the Transactions;
(iv) save for Dangshan GCL Share Purchase Agreement and Hefei Xinren Share Purchase Agreement, prior consent has been obtained from certain financial institution to release all pledges over the equity interest of the Target Companies before the completion of the Registration Procedures and the Sale Shares are free from other encumbrances; and
(v) the Company and GNE have convened board meeting and shareholders’ meeting to approve the Transactions under the Second Phase Purchase Agreements.

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LETTER FROM THE BOARD

The Sellers agreed that the Purchaser is entitled to waive one or more of the Conditions Precedent (except condition (v) above) to facilitate the Closing.

As at the Latest Practicable Date, conditions (i) and (ii) above have been fulfilled.

Closing

The Sellers shall assist to release all pledges over the equity interest of the Target Companies and the Sellers shall be responsible for and shall procure the Target Companies to complete the Registration Procedures within 7 to 15 Business Days after the payment of the First Instalment or the fulfillment of Condition Precedent (v) above (whichever is later). Within 30 Business Days after the completion of the Registration Procedures, the Purchaser undertakes to provide guarantee or procure to arrange for alternative guarantees or make other arrangements to discharge the respective Seller and its affiliates from being the guarantors in relation to the financing or liabilities of the Target Companies.

Closing Audit Report

Pursuant to the Second Phase Share Purchase Agreement, the Sellers and the Purchaser shall engage an auditing agency to audit the financials of the Target Companies for the period from the Reference Date to the Closing Date and prepare the Closing Audit Report within 15 Business Days after the Closing Date.

3. INFORMATION ON THE PARTIES TO THE SECOND PHASE SHARE PURCHASE AGREEMENTS

The Group

The Company is an exempted company with limited liability incorporated in the Cayman Islands. The principal business of the Company is investment holding.

The Group is 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 issue share capital of GNE.

The GNE Group

GNE is incorporated in Bermuda as an exempted company with limited liability. The principal business of GNE is investment holding.

The GNE Group is principally engaged in the sale of electricity, development, construction, operation and management of solar power plants. As at the Latest Practicable Date, GNE is owned as to approximately 62.28% by the Company.

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LETTER FROM THE BOARD

Anhui GCL New Energy

Anhui GCL New Energy is a company established in the PRC with limited liability and an indirect subsidiary of the Company and GNE. Anhui GCL New Energy is wholly-owned by Suzhou GCL New Energy, which is in turn indirectly owned as to approximately 92.82% by GNE. Anhui GCL New Energy is principally engaged in the development, operation and management of solar power plants.

Suzhou GCL New Energy

Suzhou GCL New Energy is a company established in the PRC with limited liability and an indirect subsidiary of the Company and GNE. Suzhou GCL New Energy is indirectly owned as to approximately 92.82% by GNE. Suzhou GCL New Energy indirectly owns a majority of solar power plants of the Company in the PRC.

4. INFORMATION ON THE PURCHASER

The Purchaser is a company incorporated in the PRC with limited liability. The Purchaser is mainly engaged in the operation of solar power, biomass power, wind power and cogeneration, production and supply of electricity and the promotion of new energy, environmental protection technology, energy saving technology, agriculture, forestry, fishing, and animal husbandry technology, planting of vegetables, flowers and Chinese herbal medicines, processing and sales of agricultural products and leisure and sightseeing activities.

The Purchaser is wholly-owned by State-owned Assets Investment & Management Group Co., Ltd. of Xuzhou* (徐州市國有資產投資經營集團有限公司) which is principally engaged in the energy and environmental protection industries, development of high and new technology and strategic investment in emerging industries.

To the best knowledge, information and knowledge of the Directors and the GNE Directors after having made all reasonable enquiries, the Purchaser and its ultimate beneficial owners are state-owned and third parties independent of the Company and GNE and their respective connected persons.

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LETTER FROM THE BOARD

5. INFORMATION ON THE TARGET COMPANIES

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

Second Phase Share Purchase Agreements Target Companies Information on the Target Companies

I Dangshan GCL Dangshan GCL is a company established in the PRC with limited liability and is principally engaged in the operation of solar power plant in the PRC. Dangshan GCL is wholly-owned by Anhui GCL New Energy and an indirect subsidiary of the Company and GNE.
II Taihu Xinneng Taihu Xinneng is a company established in the PRC with limited liability and is principally engaged in the operation of solar power plant in the PRC. Taihu Xinneng is wholly-owned by Anhui GCL New Energy and an indirect subsidiary of the Company and GNE.
III Funan GCL Funan GCL is a company established in the PRC with limited liability and is principally engaged in the operation of solar power plant in the PRC. Funan GCL is wholly-owned by Suzhou GCL New Energy and an indirect subsidiary of the Company and GNE.
IV Hefei Xinren Hefei Xinren is a company established in the PRC with limited liability and is principally engaged in the operation of solar power plant in the PRC. Hefei Xinren is wholly-owned by Anhui GCL New Energy and an indirect subsidiary of the Company and GNE.
V Tianchang GCL Tianchang GCL is a company established in the PRC with limited liability and is principally engaged in the operation of solar power plant in the PRC. Tianchang GCL is wholly-owned by Suzhou GCL New Energy and an indirect subsidiary of the Company.

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LETTER FROM THE BOARD

Set out below is an extract of the audited financial statements prepared for the financial years ended 31 December 2018 and 31 December 2019 of the Target Companies prepared in accordance with China Accounting Standards:

		Year	ended	Year	ended
Second		31 December 2019		31 December 2018
Phase Share		Profit	Profit	Profit	Profit
Purchase		before	after	before	after
Agreements	Target Companies	taxation	taxation	taxation	taxation
		RMB’000	RMB’000	RMB’000	RMB’000
I	Dangshan GCL	6,545	6,546	2,719	2,707
II	Taihu Xinneng	10,322	10,322	10,739	10,715
III	Funan GCL	47,355	41,372	37,769	37,688
IV	Hefei Xinren	2,738	2,642	2,451	2,450
V	Tianchang GCL	16,158	14,138	14,483	14,703

The table below sets out the net asset value of each of the Target Companies extracted from the audited accounts for the year ended 31 December 2019 and unaudited management accounts for the seven months ended 30 July 2020 of the Target Companies prepared in accordance with China Accounting Standards:

Second Phase Share Purchase Agreements Target Companies I Dangshan GCL II Taihu Xinneng III Funan GCL IV Hefei Xinren V Tianchang GCL Total	As at 30 July 2020 Net asset value RMB’000 51,347 47,558 203,854 13,833 80,321 396,913	As at 31 December 2019 Net asset value RMB’000 44,987 44,438 182,473 11,577 70,921
		354,396

6. FINANCIAL IMPACT OF THE TRANSACTIONS

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

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LETTER FROM THE BOARD

As at the Latest Practicable Date, the respective Seller shall retain the remaining (i) 10% equity interest in each of Dangshan GCL, Funan GCL, Hefei Xinren and Tianchang GCL; and (ii) 50% equity interest in Taihu Xinneng after the Second Phase Disposals. All the remaining equity interests in the Target Companies will be recognised as other investments in the consolidated financial statements of the Group and the GNE Group.

As at the Latest Practicable Date, it is estimated that the Group and the GNE Group will realise a net loss on the Second Phase Disposals of approximately RMB27,470,238 and such loss is calculated with reference to the difference between the Consideration of the Target Companies of approximately RMB312,728,221 and the net asset value attributed to the disposed Sale Shares based on the unaudited financial statements of the Target Companies as at 31 July 2020 of approximately RMB338,198,459, after deducting related transaction costs of the Second Phase Disposals of approximately RMB2,000,000. Such loss will not have any material impact on the earnings of the Group or the GNE Group. The actual loss as a result of the Second Phase Disposals to be recorded by the Group and the GNE Group is subject to audit and will be reassessed after completion of the Second Phase Disposals.

7. USE OF PROCEEDS FROM THE TRANSACTIONS

The table below sets out the debt profile of the GNE Group for the upcoming 12 months as at 30 June 2020:

Indebtedness repayable within one year

Bank loans and other loans from independent third parties Project loans Bonds and senior notes Loans from related companies Lease liabilities Loans directly associated with assets held for sale Total	RMB’000 7,158,113 3,265,179 3,802,242 438,056 110,397 754,939
	15,528,926

The net cash proceeds from the Transactions (being the sum of the aggregate Consideration and the total Net Payable Amount as at the Reference Date amounting to approximately RMB987,114,000, minus estimated taxes and transaction costs of approximately RMB2,000,000) is expected to be approximately RMB985,114,000, which the Company and GNE intend to use for repayments of its bank loans and other loans from independent third parties which are repayable on or before 30 June 2021 amounting to RMB7,158,113,000 as set out above.

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LETTER FROM THE BOARD

8. REASONS AND BENEFITS OF THE TRANSACTIONS

Upon completion of the Transactions, the Target Companies will no longer be subsidiaries of the Group and the GNE Group, and the profit and loss as well as the assets and liabilities of the Target Companies will no longer be consolidated into the consolidated financial statements of the Group and the GNE Group. The liabilities of the Group and the GNE Group will decrease by approximately RMB950,957,000. Meanwhile, the cash derived from the Transactions amounted to approximately RMB985,114,000, which will be used for further repayment of debts, and the gearing ratio of the GNE Group will decrease by approximately 0.7%, calculated with reference to the unaudited financial statements of the GNE Group as at 30 June 2020, effectively reducing the financial risks.

Despite the estimated net loss on the Second Phase Disposals, the Second Phase Disposal is one of the important steps taken by the Company, through GNE, to achieve its ‘‘transformation and upgrade’’ development objective and transformation to an asset-light model.

Solar power generating business is the principal business engaged by GNE, and one of the business segments (being the new energy business segment) operated by the Company through its subsidiary GNE and other subsidiaries. Solar power generating business is also a capital intensive industry, which highly relies on external financing in order to fund for the construction of solar power plants while the recovery of capital investment takes a long period of time. Given the Company, through GNE, highly relies on external financing in order to obtain investment capital for new solar power plant project development, any interest rate changes will have an impact on the capital expenditure and finance expenses of the Company, through GNE, hence, affecting its operating results. Therefore, transformation into an asset-light model, being the business model adopted by the Company, through GNE, is an effective way to reduce its debts and interest rate exposure.

The Company, through GNE, intends to reinforce the strategic cooperation with domestic centralised management enterprises and local state-owned enterprises, including the Purchaser to achieve an asset-light model. After the completion of the Second Phase Disposals, the Group, through the GNE Group, and the Purchaser will further explore other possible co-operation opportunities, including but not limited to, disposals of the Group’s existing solar power plants in the PRC.

As at the Latest Practicable Date, the Group, through GNE, had entered into several share purchase agreements in the year of 2020 to dispose its equity interest in certain subsidiaries as set out below.

On 21 January 2020, the Group, Huaneng Gongrong No. 1 (Tianjin) Equity 一 Investment Fund Partnership (Limited Partnership) (華能工融號（天津）股權投資基金合夥企業（有限合夥）) (‘‘Huaneng No. 1 Fund’’) and Huaneng Gongrong No. 2 (Tianjin) Equity Investment Fund Partnership (Limited Partnership) (華能工融二號（天津）股權投資基金合夥企業（有限合夥）) (‘‘Huaneng No. 2 Fund’’) entered into a series of six share purchase agreements, pursuant to which the GNE Group agreed to, among other things, sell equity interest in six subsidiaries of the Group and the GNE Group to Huaneng No. 1 Fund and Huaneng No. 2 Fund (the ‘‘Huaneng First Phase Disposals’’). Please refer to (i)

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LETTER FROM THE BOARD

the joint announcement of GNE and the Company dated 21 January 2020; and (ii) the circular of the Company dated 29 April 2020 in relation to the Huaneng First Phase Disposals for further details.

On 29 June 2020, the GNE Group and CDB New Energy Technology Co., Ltd. (國開新能源科技有限公司) (‘‘CDB New Energy’’) entered into a share purchase agreement, pursuant to which the GNE Group agreed to, among other things, sell equity interest in Jinhu Zhenghui Solar Power Co., Ltd. (金湖正輝太陽能電力有限公司) (‘‘Jinhu Disposal’’). Please refer to the joint announcement of GNE and the Company dated 29 June 2020 in relation to the Jinhu Disposal for further details.

On 29 September 2020, the GNE Group, Huaneng No. 1 Fund and Huaneng No. 2 Fund entered into to a series of six share purchase agreements, pursuant to which the GNE Group agreed to, among other things, sell equity interest in six subsidiaries of the Group and the GNE Group to Huaneng No. 1 Fund and Huaneng No. 2 Fund (the ‘‘Huaneng Second Phase Disposals’’). Please refer to (i) the joint announcement of GNE and the Company dated 29 September 2020; and (ii) the circular of the Company dated 4 December 2020 in relation to the Huaneng Second Phase Disposals for further details.

On 16 November 2020, the GNE Group and the Purchaser entered into to the First Phase Share Purchase Agreements, pursuant to which the GNE Group agreed to, among other things, sell equity interest in five subsidiaries of the GNE Group to the Purchaser, i.e. the First Phase Disposals. Please refer to the joint announcement of GNE and the Company dated 16 November 2020 in relation to the First Phase Disposals for further details.

On 19 November 2020, the GNE Group, Huaneng No. 1 Fund and Huaneng No. 2 Fund entered into to a series of 14 share purchase agreements, pursuant to which the GNE Group agreed to, among other things, sell equity interest in 14 subsidiaries of the Group and the GNE Group to Huaneng No. 1 Fund and Huaneng No. 2 Fund (the ‘‘Huaneng Third Phase Disposals’’). Please refer to the joint announcement of GNE and the Company dated 19 November 2020 in relation to the Huaneng Third Phase Disposals for further details.

On 20 November 2020, the Group and Zhenfa New Energy Technology Co., Ltd. (振發新能源科技有限公司) (‘‘Zhenfa New Energy’’) (as sellers), Hunan Xinhua Water Conservancy and Electric Power Co., Ltd. (湖南新華水利電力有限公司) (‘‘Hunan Xinhua’’) and Jia Wei (Shanghai) Photovoltaic Power Co., Ltd. (珈偉（上海）光伏電力有限公司) (‘‘Jia Wei Shanghai’’) (as purchasers) and Jiangsu Zhenfa Holding Group Co., Ltd. (江蘇振發控股集團有限公司) (‘‘Jiangsu Zhenfa Holding’’) (act as the guarantor of Zhenfa New Energy) entered into to a share purchase agreement, pursuant to which the Group agreed to, among other things, sell 51% equity interest in Ningxia Qingyang New Energy Co., Ltd.* (寧夏慶陽新能源有限公司) (‘‘Ningxia Qingyang’’) to Hunan Xinhua (the ‘‘Ningxia Qingyang Disposal’’). Please refer to the announcement of the Company dated 20 November 2020 in relation to the Ningxia Qingyang Disposal for further details.

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LETTER FROM THE BOARD

On 22 November 2020, the GNE Group and the Purchaser entered into the Second Phase Share Purchase Agreements, pursuant to which the GNE Group agreed to, among other things, sell equity interest in five subsidiaries of the Group and the GNE Group to the Purchaser, i.e. the Second Phase Disposals. Please refer to the joint announcement of GNE and the Company dated 22 November 2020 in relation to the Second Phase Disposals and this circular for further details.

On 2 December 2020, the Group and Zhejiang Qixin Technology Limited (浙江齊芯科技有限責任公司) (‘‘Zhejiang Qixin’’) entered into a series of two share purchase agreements, pursuant to which the Group agreed to, among other things, to sell equity interest in Sino IC Leasing Co., Ltd. (芯鑫融資租賃有限責任公司) (‘‘Sino IC Leasing’’) (‘‘Sino IC Leasing Disposals’’). Please refer to the announcement of the Company dated 2 December 2020 in relation to the Sino IC Leasing Disposals for further details.

On 4 December 2020, the GNE Group and Beijing United Rongbang New Energy Technology Co., Ltd. (北京聯合榮邦新能源科技有限公司) (‘‘Beijing United Rongbang’’) entered into a share purchase agreement, pursuant to which the GNE Group agreed to, among other things, to sell equity interest in Zhenglanqi State Power Photovoltaic Co., Ltd. (正藍旗國電光伏發電有限公司) (‘‘Zhenglanqi Disposal’’). Please refer to the joint announcement of GNE and the Company dated 4 December 2020 in relation to the Zhenglanqi Disposal for further details.

On 10 December 2020, the GNE Group and State Power Investment Corporation Guizhou Jinyuan Weining Energy Co., Ltd.* (國家電投集團貴州金元威寧能源股份有限公司) (‘‘Weining Energy’’) entered into a series of four share purchase agreements, pursuant to which the GNE Group agreed to, among other things, to sell equity interest in four subsidiaries of the Group and the GNE Group to Weining Energy (‘‘Weining Energy Disposals’’). Please refer to the joint announcement of GNE and the Company dated 10 December 2020 in relation to the Weining Energy Disposals for further details.

In addition, the Group and the GNE Group are currently under negotiation with certain new energy companies in the PRC (including domestic centralised management enterprises, local state-owned enterprises and listed companies) for further potential disposals of their respective subsidiaries and will make further announcement as and when appropriate in compliance with the Listing Rules. Save as disclosed above, as at the Latest Practicable Date, the Group and the GNE Group have not entered into any memorandum of understanding or agreement regarding further disposal or downsize of their existing businesses.

For the purpose of this section, the Remaining Group shall mean the Group after completion of the First Phase Disposals, Second Phase Disposals, Huaneng First Phase Disposals, Huaneng Second Phase Disposals, Huaneng Third Phase Disposals, Jinhu Disposal, Ningxia Qingyang Disposal, Sino IC Leasing Disposals, Zhenglanqi Disposal and Weining Energy Disposals (the ‘‘2020 Disposals’’).

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LETTER FROM THE BOARD

The table below sets out the respective number of solar power plants operated by the Remaining Group and their respective locations after the completion of the 2020 Disposals:

Geographic location The GNE Group Jiangsu Shaanxi Henan Qinghai Inner Mongolia Yunnan Guangdong Shandong Guizhou Hunan Jilin Liaoning Jiangxi Hubei Hainan Zhejiang Fujian Ningxia Sichuan Gansu Hebei Shanghai United States Sub-total The Group (excluding the GNE Group) Jiangsu Shaanxi Ningxia Xizang Xinjiang United States Sub-total Total	Number of solar power plant(s) 37 19 10 4 7 8 8 3 6 5 4 3 3 3 2 2 3 2 1 2 1 1 2 136 4 2 1 1 1 14 23 159	Grid- connected Capacity (MW) 409 1,024 414 100 243 279 133 93 235 101 51 47 100 49 55 21 55 60 50 39 21 7 134
		3,720
		83 100 30 10 30 18
		271
		3,991

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LETTER FROM THE BOARD

Through the divestiture of the Operational Solar Power Plant Projects, the asset-light model allows the Remaining Group to optimise the finance structure by lowering gearing ratio as well as reducing debt and interest rate exposure.

In addition to optimising the finance structure, the Remaining Group sought to explore opportunities to expand its business by providing more operation, management and maintenance services, in particular to other solar power plant operators in the PRC (including purchasers of certain solar power plant projects disposed by the Group), thereby generating an additional and stable source of income.

Based on the reasons above and having considered the scale of the Remaining Group’s solar power plants business with an aggregate approximately 4.0GW of grid-connected capacity, the Directors and the GNE Directors believe that the business model and the asset-light strategy of the Remaining Group (after completion of the 2020 Disposals) could ensure its sufficient level of operations, viability and sustainability. As at the Latest Practicable Date, the Company and GNE do not have any intention to acquire new business in the future.

Although the Target Companies are profit-making, they have experienced a net cash outflow due to substantial delay in receiving the national subsidy from the relevant PRC governmental entities. The capital and operating expenses of the Target Companies have been substantially funded by shareholders’ loans from the GNE Group from time to time. The Second Phase Disposals represent an opportunity for the Group, through the GNE Group, to recoup its capital investments in the Target Companies and to relieve the Group, through the GNE Group, from its funding commitment to the Target Companies in the form of shareholders’ loans, which are costly to maintain.

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 Second Phase 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 Second Phase Share Purchase Agreements is in the interests of the Company and the Shareholders as a whole.

9. LISTING RULES IMPLICATIONS

As the Sellers, being indirect subsidiaries of the Company, entered into the First Phase Disposals and the Second Phase Disposals with the Purchaser within a 12-month period, the Disposals contemplated in the First Phase Purchase Agreements and the Second Phase Share Purchase Agreements shall be aggregated as a series of transactions for the Company pursuant to Rule 14.22 of the Listing Rules.

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LETTER FROM THE BOARD

Since the highest of the applicable percentage ratios in respect of the First Phase Disposals and the Second Phase Disposals is over 25% but less than 75%, the entering into of the Second Phase Disposals constitutes a major transaction of the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting, announcement, circular and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

10. EGM

Set out on pages EGM-1 to EGM-3 of this circular is a notice convening the EGM to be held at Strategy II–III, Level 8, W Hong Kong, 1 Austin Road West, Kowloon Station, Kowloon, Hong Kong on Friday, 15 January 2021 at 11: 30 a.m..

At the EGM, ordinary resolution(s) for approving the Transactions and the entering into and performance of obligations under the Second Phase 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 resolutions 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 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 proxy form shall be deemed to be revoked.

Record date (being the last date of registration of any share transfer given there will be no book closure) for determining the entitlement of the Shareholders to attend and vote at the EGM will be on Tuesday, 12 January 2021. In order to be entitled to attend and vote at the EGM, 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 at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong, no later than 4: 30 p.m on Tuesday, 12 January 2021.

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LETTER FROM THE BOARD

11. 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 Second Phase 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 to approve the Transactions, the entering into and performance of obligations under the Second Phase Share Purchase Agreements as set out in the notice of the EGM.

12. ADDITIONAL INFORMATION

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

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

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

1. FINANCIAL INFORMATION OF THE GROUP

The audited consolidated financial statements of the Group for the years ended 31 December 2018 and 31 December 2019 and the unaudited consolidated financial statements of the Group for the six months ended 30 June 2020 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.gclpoly.com.hk):

. the annual report of the Company for the year ended 31 December 2018 published on 26 April 2019 (pages 118–351);
. the annual report of the Company for the year ended 31 December 2019 published on 29 April 2020 (page 162–376); and
. the interim report of the Company for the six months ended 30 June 2020 published on 17 September 2020 (pages 29–90).

2. STATEMENT OF INDEBTEDNESS AND CONTINGENT LIABILITIES OF THE GROUP

At the close of business on 30 November 2020, being the latest practicable date for the purpose of this indebtedness statement, the Group had the following outstanding borrowings:

Carrying amount of bank and other borrowings Principal amount of notes and bonds payables Carrying amount of loans from related companies Lease liabilities	The Group Secured Unsecured RMB’000 RMB’000 37,176,342 3,367,621 — 3,578,951 700,446 994,208 997,968 1,097,634 38,874,756 9,038,414	Total RMB’000 40,543,963 3,578,951 1,694,654 2,095,602
		47,913,170

The Group’s secured borrowings were secured, individually or in combination, by (i) certain property, plant and equipment, investment properties and right-of-use assets 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; (v) certain equity interests in some project companies and an associate; and (vi) rental deposits of the Group.

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

At 30 November 2020, certain borrowings of the Group amounting to RMB32,371,461,000, are guaranteed individually or in combination by entities within the Group. The remaining indebtedness amounting to RMB15,541,709,000 are not guaranteed. At 30 November 2020, the Group provided a total guarantee of RMB7,290,365,000, RMB900,000,000, RMB119,000,000 and RMB1,143,800,000 to banks and financial institutions in respect of banking facilities and financing arrangements of associates, a joint venture, third party and the Target Companies, respectively. The associates, joint venture, third party and the Target Companies had utilised RMB5,158,619,000, RMB882,004,000, RMB77,350,000 and RMB902,907,000 in total of such facilities at 30 November 2020, respectively.

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 November 2020, the Group did not have any debt securities authorised or otherwise 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, lease liabilities, mortgages or charges, other 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 November 2020.

3. WORKING CAPITAL STATEMENT

As at 30 November 2020, the Group’s total borrowings comprising bank and other borrowings, notes and bonds payables, loans from related companies and lease liabilities amounted to approximately RMB47,913,170,000.

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 financing plans and measures can be successfully executed, the Group will have sufficient working capital for its 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 the implementation of financial plans and measures of the Group and the GNE Group become unsuccessful, the Group will not have sufficient working capital for at least the next twelve months from the date of this circular.

In addition to the successful implementation of measures of the GNE Group, including but not limited to the successful transformation to a light-asset model, the completion of the disposals and divestments in relation to solar power plant assets, the sufficiency of the Group’s working capital to satisfy its requirements for at least the next twelve months from the date of this circular is also dependent on the Group’s ability to generate adequate

– I-2 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

financing and operating cash flows through successful renewal of its bank borrowings upon expiry, 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, other short-term or long-term financing equity issuance.

Notwithstanding the above, significant uncertainties exist as to whether the Group can achieve the plans and measures to generate adequate cash inflow as scheduled, failing which the Group will strive to meet the working capital sufficiency by continuous negotiations with banks to renew existing loans, exploring funding channels through equity and debt markets, and obtaining waiver from the relevant banks if the Group is not able to satisfy any of the covenant requirements. In particular, the Group has negotiated with certain banks and financial institutions for providing credit facilities in both on-shore and off-shore. The Group has also obtained direct confirmations from certain banks stating that they do not foresee any reason to withdraw the existing facilities in the near future. The Group will continue to negotiate with other banks to obtain credit facilities to ensure the Group’s bank borrowings can be renewed on an on-going basis.

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 2019, 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 2019, the Group recorded a total revenue of approximately RMB19,250 million, whilst the total revenue for the year ended 31 December 2018 was approximately RMB20,565 million. Gross profit and gross profit margin for the year ended 31 December 2019 were approximately RMB4,678 million and 24.3% respectively, whilst the gross profit and gross profit margin for the year ended 31 December 2018 were approximately RMB5,032 million and 24.5% respectively. Loss attributable to owners of the Company for the year ended 31 December 2019 amounted to approximately RMB197 million as compared to the loss attributable to owners of the Company of RMB693 million for the year ended 31 December 2018.

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 2019, the annual production capacity of polysilicon of the Group’s Xuzhou base remained at 70,000MT. As at 31 December 2019, the Group’s annual wafer production capacity reached 35GW.

– I-3 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

The Group’s solar farm business manages and operates 371MW solar farms. As at 31 December 2019, the Group’s solar farm business includes 18MW of solar farms in the United States and 353MW of solar farms in the PRC.

The Group’s new energy business represents the business operations of GNE, which is principally engaged in the development, construction, operation and management of solar farms. As at 31 December 2019, the aggregated installed capacity of the grid-connected solar farms of GNE Group was 7,145MW.

The outbreak of coronavirus disease (‘‘COVID-19’’) in the PRC, which subsequently spread throughout other regions, has affected many businesses to different extent in early 2020. The respective governments in the PRC and other regions had implemented different types and levels of precautionary measures in an attempt to curb the spread of the pandemic. Hence, the Group’s ability to serve customers will largely depend on (i) the effectiveness of the government measures that have been implemented; (ii) continuous availability of workforce which may be affected by the temporary travel restrictions and home quarantine requirements; and (iii) customers’ confidence and demand which may be influenced by the market sentiments and economic performances in different jurisdictions.

Based on available information up to the Latest Practicable Date, the management of the Group considers that COVID-19 has negative impacts to the global economy, business environment and directly and indirectly affect the operations of the Group. Given the dynamic nature of these circumstances, the related impact on our Group’s operations and financial position could not be reasonably estimated at this stage.

– I-4 –

APPENDIX II

GENERAL INFORMATION

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 Group. 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

(i) Interests of Directors and chief executives of the Company

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 he has taken or deemed to have under such provisions of the SFO); or (ii) to be and were entered into in the register required to be kept by the Company pursuant to Section 352 of the SFO; or (iii) as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers of the Listing Rules, were as follows:

(a) 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 ordinary shares held
Number of
underlying
shares
Total
Approximate
percentage of
issued shares
capital
Beneficiary
of a trust
Corporate
interests
Personal
interests
(Note 3)
6,370,388,156
(Note 1)
—
—
—
6,370,388,156
30.13%
—
—
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
30.14%
—
—
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
0.05%
—
—
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 –

APPENDIX II

GENERAL INFORMATION

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 wholly-owned 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$1.160 or HK$1.324 per share.
(3) The total number of ordinary shares of the Company in issue as at the Latest Practicable Date is 21,141,049,207.

(b) Long position in the shares of associated corporations

GNE, in which the Company indirectly owned 62.28% issued shares as at the Latest Practicable Date, is a subsidiary of the Company.

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

Number of ordinary shares of GNE held
Number of
underlying
shares held
Total
Approximate
percentage of
issued shares
capital of GNE
Beneficiary
of a trust
Corporate
interests
Personal
interests
(Note 3)
1,905,978,301
(Note 1)
—
—
—
1,905,978,301
9.99%
1,905,978,301
(Note 1)
—
—
3,523,100
(Note 2)
1,909,501,401
10.01%
—
—
—
27,178,200
(Note 2)
27,178,200
0.14%
—
—
—
15,099,000
(Note 2)
15,099,000
0.08%

Notes:

(1) 1,905,978,301 shares in GNE 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 30% of the issued shares in GCL System Integration, is indirectly held by the Zhu Family Trust and Mr. Zhu Yufeng, an executive director of the Company and GNE and son of Mr. Zhu Gongshan.
(2) These are share options granted by GNE. 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 of 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.

– II-2 –

APPENDIX II

GENERAL INFORMATION

(3) The total number of ordinary shares of GNE in issue as at the Latest Practicable Date is 19,073,715,441.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor the chief executive of the Company had any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required (i) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO); or (ii) to be and were entered into in the register that was required to be kept under Section 352 of the SFO; or (iii) as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

(ii) Interests of substantial shareholders

As at the Latest Practicable Date, so far as is known to the Directors or chief executive of the Company, the following persons (other than a Director or chief executive of the Company) had an interest or short position in the shares or underlying shares of the Company as recorded in the register kept pursuant to the Section 336 of the SFO:

			Approximate
		Number of	percentage of
		shares/	issued share
		underlying	capital of the
Name	Capacity/nature of interest	shares	Company
Asia Pacific Energy	Interests in a controlled	6,370,388,156	30.13%
Fund Limited	corporation (Note 1)		(Note 2)

Notes:

(1) An aggregate of 6,370,388,156 shares 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 the Latest Practicable Date is 21,141,049,207.

Save as disclosed aforesaid, so far as is known to any Directors or chief executive of the Company, as at the Latest Practicable Date, no other persons (other than a Director or chief executive of the Company) who had an interest or short position in the shares or underlying shares of the Company as recorded in the register kept pursuant to Section 336 of the SFO.

– II-3 –

APPENDIX II

GENERAL INFORMATION

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) (‘‘GCL System Integration’’) GCL Energy Engineering Co., Ltd. (協鑫能源工程有限公司) (‘‘GCL Energy Engineering’’), Suzhou GCL Energy Technology Co., Ltd. (蘇州協鑫能源科技有限公司) (‘‘GCL Energy Technology’’) and GCL (Jiangsu) Construction and Management Co., Ltd. (江蘇協鑫建設管理有限公司) (‘‘GCL Construction Management’’) respectively, as disclosed in the announcements of the Company dated 28 February 2019, 27 September 2019 and 31 December 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 2019, being the date to which the latest published and audited consolidated financial statements of the Company were made up. GCL System Integration and GCL Energy Engineering are both ultimately controlled by Mr. Zhu Yufeng and the Asia Pacific Energy Fund which Mr. Zhu Gongshan and his family (including Mr. Zhu Yufeng) are beneficiaries. GCL Energy Technology and GCL Construction Management are both ultimately held and controlled by the Asia Pacific Energy Fund. Mr. Zhu Gongshan and Mr. Zhu Yufeng are both the Directors.

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.

– II-4 –

APPENDIX II

GENERAL INFORMATION

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 in which the relevant Principal activities of Percentage interest Name of Director Director has interest the competing company in competing company Mr. Zhu Yufeng 錫林郭勒中能硅業有限公司 Intend to produce Mr. Zhu Yufeng, Xilingol Zhongneng polysilicon ingot through companies Silicon Co., Ltd.* upon completion of controlled by him, (Dormant and inactive) construction holds 70% 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 2019, being the date to which the latest published and audited financial statements of the Group were made up.

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 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) 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;
(iii) the series of seven share purchase agreements dated 22 May 2019 entered into between Suzhou GCL New Energy as seller and Shanghai Rongyao New Energy Co., Ltd. (上海榕耀新能源有限公司) as purchaser in relation to, among others, (i) the 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

– II-5 –

APPENDIX II

GENERAL INFORMATION

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 ‘‘Disposed Companies’’) together with 70% of the outstanding shareholder’s loan owed from the Disposed Companies to Suzhou GCL New Energy at an aggregate consideration of RMB1,740,616,700; and (ii) the grant of put options by Suzhou GCL New Energy to Shanghai Rongyao New Energy Co., Ltd. and/or the Disposed Companies;

(iv) 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);
(v) 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;
(vi) 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;
(vii) 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

– II-6 –

APPENDIX II

GENERAL INFORMATION

Technology Co., Ltd.* (新疆協鑫新能源材料科技有限公司) (‘‘Xinjiang GCL’’) 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;

(viii) the Nanzhao Finance Lease Agreements dated 9 August 2019 enter into between GNE Group and China Resources Leasing Co., Ltd. (華潤租賃有限公司) (‘‘CR Leasing’’) pursuant to which (i) CR Leasing shall purchase the Nanzhao Leased Assets from Nanzhao Xinli Photovoltaic Power Co., Ltd. (南召鑫力光伏電力有限公司) (‘‘Nanzhao Xinli’’) at an aggregate consideration of RMB332,000,000 payable in two instalments; and (ii) following the acquisition, CR Leasing, as the lessor, shall lease the Nanzhao Leased Assets to Nanzhao Xinli, as the lessee, for a term of 10 years at an aggregated estimated rent of RMB497,856,000. In addition, pursuant to the Nanzhao Finance Lease Agreements, Nanzhao Xinli shall pay CR Leasing a finance lease handling fee of RMB13,280,000;
(ix) the cooperation framework agreement dated 18 November 2019 entered into between GNE and China Huaneng Group, regarding the Company’s disposal of (i) certain solar power plants in the PRC; or (ii) certain project companies of the Group which operate those power plants to China Huaneng Group or its designated party;
(x) the series of six share purchase agreements dated 21 January 2020 entered into between Suzhou GCL New Energy and Ningxia GCL New Energy as sellers, GCL Group Limited (協鑫集團有限公司) (‘‘GCL Group’’) as guarantor and Huaneng No. 1 Fund and Huaneng No. 2 Fund as purchasers in relation to, among others, (i) the sale and purchase of the entire equity interest in Yuganxian GCL New Energy Co., Ltd. (余干縣協鑫新能源有限責任公司), Ningxia Jinxin Photovoltaic Power Co., Ltd. (寧夏金信光伏電力有限公司), Ningxia Lvhao Photovoltaic Power Generation Co., Ltd. (寧夏綠昊光伏發電有限公司), Hami Orui Photovoltaic Power Generation Co., Ltd. (哈密歐瑞光伏發電有限公司), Hami Yaohui Photovoltaic Power Co., Ltd. (哈密耀輝光伏電力有限公司) and Ningxia Jinli Photovoltaic Power Co., Ltd.* (寧夏金禮光伏電力有限公司) (the ‘‘Huaneng First Phase Target Companies’’) at a total consideration of RMB850,500,000; and (ii) the grant of put options to Huaneng No. 1 Fund and Huaneng No. 2 Fund;
(xi) the second supplemental agreement dated 17 March 2020 entered into between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. (江蘇中能硅業科技發展有限公司), Konca Solar Cell Co., Ltd. (高佳太陽能股份有限公司) and Tianjin Zhonghuan Semiconductor Co., Ltd.* (天津中環半導體股份有限公司) in relation to the capital increase of Inner Mongolia Zhonghuan GCL Solar Material Co., Ltd. (內蒙古中環協鑫光伏材料有限公司);
(xii) the share purchase agreement dated 29 June 2020 entered into between Suzhou GCL New Energy as seller and CDB New Energy as purchaser in relation to disposal of 75% equity interest in one subsidiary of the Company at a total consideration of RMB136,624,000;

– II-7 –

APPENDIX II

GENERAL INFORMATION

(xiii) the supplemental agreement dated 24 September 2020 entered into between Sino IC Leasing as lessor and Jiangsu GCL Silicon Material Technology Development Co., Ltd.* (江蘇協鑫硅材料科技發展有限公司) as lessee in relation to the amendment and supplement of certain terms and conditions of the initial finance lease agreements;
(xiv) the series of six share purchase agreements dated 29 September 2020 entered into between Suzhou GCL New Energy, Changzhou Zhonghui Photovoltaic Technology Co., Ltd. (常州中暉光伏科技有限公司) and Ningxia GCL New Energy as sellers, GCL Group as guarantor and Huaneng No. 1 Fund and Huaneng No. 2 Fund as purchasers in relation to, among others, (i) the sale and purchases of the entire equity interest in Baotou Shi Zhong Li Photovoltaic Co., Ltd. (包頭市中利騰暉光伏發電有限公司), Qi County GCL New Energy Co., Ltd. (淇縣協鑫新能源有限公司), Ningxia Zhongwei GCL Photovoltaic Power Co., Ltd. (寧夏中衛協鑫光伏電力有限公司), Huixian Shi GCL Photovoltaic Power Co., Ltd. (輝縣市協鑫光伏電力有限公司), Ruyang GCL New Energy Co., Ltd. (汝陽協鑫新能源有限公司) and Hubei Macheng Jinfu Solar Energy Co., Ltd.* (湖北省麻城市金伏太陽能電力有限公司) (the ‘‘Huaneng Second Phase Target Companies’’) at a total consideration of RMB576,001,213; and (ii) the grant of put options to Huaneng No. 1 Fund and Huaneng No. 2 Fund;

(xv) the First Phase Share Purchase Agreements;

(xvi) the share purchase agreements dated 19 November 2020 entered into between five subsidiaries of the Company and GNE (as the sellers) and Huaneng No. 1 Fund and Huaneng No. 2 Fund (as purchasers) in relation to (i) disposal of the entire equity interest in twelve wholly-owned subsidiaries of the Company, 56.51% equity interest in Yili GCL Energy Limited (伊犁協鑫能源有限公司) and 51% equity interest in Yuncheng Xinhua Energy Development Co,. Ltd. (鄆城鑫華能源開發有限公司) at a total consideration of RMB666,653,912; and (ii) grant of put options to Huaneng No. 1 Fund and Huaneng No. 2 Fund, as detailed in the joint announcement of GNE and the Company dated 19 November 2020;
(xvii) the share purchase agreement dated 20 November 2020 entered into between Suzhou GCL-Poly Solar Energy Investment Ltd.* (蘇州保利協鑫光伏電力投資有限公司) and Zhenfa New Energy (as the sellers), Hunan Xinhua and Jia Wei Shanghai (as the purchasers) and Jiangsu Zhenfa Holding (as the guarantor of Zhenfa New Energy) in relation to, among others, disposal of 51% equity interest in Ningxia Qingyang to Hunan Xinhua at a consideration of RMB178,500,000, as detailed in the announcement of the Company dated 20 November 2020;

(xviii) the Second Phase Share Purchase Agreements;

(xix) the share purchase agreement dated 2 December 2020 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 Apex Investment Holdings Limited (傲峰投資控股有限

– II-8 –

APPENDIX II

GENERAL INFORMATION

公司) as the sellers and Zhejiang Qixin as the purchaser in relation to the disposal of approximately 2.8% and 3.2% equity interest in Sino IC Leasing at a total consideration of RMB727,878,881;

(xx) the share purchase agreement dated 4 December 2020 entered into between Suzhou GCL New Energy as seller and Beijing United Rongbang as purchaser in relation to disposal of 99.2% equity interest in one subsidiary of the Company at a total consideration of RMB211,100,000; and
(xxi) the share purchase agreements dated 10 December 2020 entered into between Suzhou GCL New Energy and Guangxi GCL New Energy Investment Co., Ltd. (廣西協鑫新能源投資有限公司) (as the sellers) and Weining Energy as the purchaser in relation to disposal of 70.36% equity interest in Qinzhou Xin Jin Solar Power Co., Ltd. (欽州鑫金光伏電力有限公司), 67.95% equity interest in Shanglin GCL Solar Power Co., Ltd. (上林協鑫光伏電力有限公司), the entire equity interest in Nanning Jinfu Electric Power Co., Ltd. (南寧金伏電力有限公司) and the entire equity interest in Hainan Tianlike New Energy Project Investment Co., Ltd.* (海南天利科新能源項目投資有限公司) at a total consideration of RMB291,300,000.

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 registered office of the Company is situated at Cricket Square, Hutchins Drive P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands.
(ii) The principal place of business of the Company in Hong Kong is situated at Unit 1703B–1706, Level 17, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong.
(iii) The branch share registrar and transfer office of the Company is Tricor Investor Services Limited situated at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(iv) 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.
(v) In case of inconsistencies, the English texts of this circular shall prevail over the Chinese texts thereof.

– II-9 –

APPENDIX II

GENERAL INFORMATION

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the principal place of business of the Company in Hong Kong at Unit 1703B–1706, Level 17, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong from 9: 00 a.m. to 5: 30 p.m. on any business day for a period of 14 days from the date of this circular:

(i) the memorandum of association and bye-laws of the Company;
(ii) the interim report of the Company for the six months ended 30 June 2020 and the annual reports of the Company for each of the financial years ended 31 December 2018 and 2019;
(iii) the material contracts referred to in the section headed ‘‘Material Contracts’’ in this appendix;
(iv) the circular of the Company dated 29 April 2020 in relation to, among others, (i) the sale and purchases of the entire equity interest in the Huaneng First Phase Target Companies at a total consideration of RMB850,500,000; and (ii) the grant of put options to Huaneng No. 1 Fund and Huaneng No. 2 Fund;
(v) the circular of the Company dated 4 December 2020 in relation to, among others, (i) the sale and purchases of the entire equity interest in the Huaneng Second Phase Target Companies at a total consideration of RMB576,001,213; and (ii) the grant of put options to Huaneng No. 1 Fund and Huaneng No. 2 Fund; and
(vi) this circular.

– II-10 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

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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 Strategy II–III, Level 8, W Hong Kong, 1 Austin Road West, Kowloon Station, Kowloon, Hong Kong on Friday, 15 January 2021 at 11: 30 a.m. for the purpose of considering and, if thought fit, approving the following resolution as an ordinary resolution of the Company.

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 five share purchase agreements dated 22 November 2020 entered into between Anhui GCL New Energy Investment Co., Ltd. (安徽協鑫新能源投資有限公司) (‘‘Anhui GCL New Energy’’) and Suzhou GCL New Energy Investment Co., Ltd. (蘇州協鑫新能源投資有限公司) (‘‘Suzhou GCL New Energy’’) (the ‘‘Sellers’’) and Xuzhou State Investment & Environmental Protection Energy Co., Ltd.* (徐州國投環保能源有限公司) (the ‘‘Purchaser’’) (the ‘‘Second Phase Share Purchase Agreements’’) in relation to sale and purchase of:
- (i) 90% equity interest in each of Dangshan GCL Solar Power Co., Ltd. (碭山協鑫光伏電力有限公司), Funan GCL Solar Power Co., Ltd. (阜南協鑫光伏電力有限公司), Hefei Xinren Solar Power Co., Ltd. (合肥鑫仁光伏電力有限公司) and Tianchang City GCL Solar Power Co., Ltd. (天長市協鑫光伏電力有限公司); and

– EGM-1 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

(ii) 50% equity interest in Taihu Xinneng Solar Power Co., Ltd.* (太湖鑫能光伏電力有限公司) (together the ‘‘Target Companies’’) (the ‘‘Second Phase Disposals’’) 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 Second Phase Disposals and the transactions contemplated under the Second Phase 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 December 2020

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 at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong, not less than 48 hours before the time fixed for holding the EGM or any adjournment thereof.
(3) Completion and delivery of the form of proxy will not preclude a shareholder of the Company from attending and voting in person at the EGM convened and in such event, the form of proxy shall be deemed to be revoked. It is advised that all Shareholders, particularly Shareholders who are subject to quarantine in relation to Coronavirus Disease 2019 (COVID-19), that they may appoint any person or the chairman of the EGM as a proxy to vote on the resolution, instead of attending the EGM in person. The form of proxy can be downloaded from the website of the Company at http://www.gcl-poly.com.hk or HKEXnews at www.hkexnews.hk.
(4) 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.

– EGM-2 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

(5) Record date (being the last date of registration of any share transfer given there will be no book closure) for determining the entitlement of the shareholders of the Company to attend and vote at the above meeting will be on Tuesday, 12 January 2021. In order to be eligible to attend and vote at the EGM, unregistered holders of the shares shall ensure that all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration not later than 4: 30 p.m. (Hong Kong time) on Tuesday, 12 January 2021.
(6) If Typhoon Signal No. 8 or above, or ‘‘extreme conditions’’ is caused by super typhoon announced by the Government of Hong Kong, or a ‘‘black’’ rainstorm warning is in effect any time after 8 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.
(7) In view of the ongoing COVID-19 epidemic and recent guidelines for prevention and control of its spread, the Company will implement the following precautionary measures at the EGM to protect the Shareholders, staff and other stakeholders who attend the EGM from the risk of infection:
(i) compulsory body temperature checks will be conducted on every Shareholder, proxy and other attendee. Any person with a body temperature of 37 degrees Celsius or higher may be denied entry into the EGM venue or be required to leave the EGM venue;
(ii) the Company will require all attendees to wear surgical face masks before they are permitted to attend, and during their attendance of the EGM at all times, and to maintain a safe distance between seats (please bring your own mask);
(iii) no refreshment will be served at the EGM;
(iv) no souvenirs will be distributed at the EGM; and
(v) no guest will be allowed to enter the EGM venue if he/she is wearing quarantine wristband issued by the Government of Hong Kong.

– EGM-3 –

AI assistant

GCL Technology Holdings Limited — Proxy Solicitation & Information Statement 2020

50888_rns_2020-12-28_1adb6d34-d02e-4c83-a70c-6f5e9684ab1b.pdf

(1) MAJOR TRANSACTION DISPOSAL OF SUBSIDIARIES AND (2) NOTICE OF EXTRAORDINARY GENERAL MEETING

PRECAUTIONARY MEASURES FOR THE EGM

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

To the Shareholders

(1) MAJOR TRANSACTION DISPOSAL OF SUBSIDIARIES AND

(2) NOTICE OF EXTRAORDINARY GENERAL MEETING

1. INTRODUCTION

2. THE SECOND PHASE SHARE PURCHASE AGREEMENTS

Date

Parties

Assets to be sold

Consideration

Basis of the Consideration

Payment arrangements of the Consideration

Net Payable Amount

LETTER FROM THE BOARD

Transition Period Arrangement

Other Undertakings

Conditions Precedent

Closing

Closing Audit Report

3. INFORMATION ON THE PARTIES TO THE SECOND PHASE SHARE PURCHASE AGREEMENTS

The Group

The GNE Group

Anhui GCL New Energy

Suzhou GCL New Energy

4. INFORMATION ON THE PURCHASER

5. INFORMATION ON THE TARGET COMPANIES

LETTER FROM THE BOARD

6. FINANCIAL IMPACT OF THE TRANSACTIONS

LETTER FROM THE BOARD

7. USE OF PROCEEDS FROM THE TRANSACTIONS

Indebtedness repayable within one year

8. REASONS AND BENEFITS OF THE TRANSACTIONS

LETTER FROM THE BOARD

LETTER FROM THE BOARD

9. LISTING RULES IMPLICATIONS

10. EGM

11. RECOMMENDATION

12. ADDITIONAL INFORMATION

1. FINANCIAL INFORMATION OF THE GROUP

2. STATEMENT OF INDEBTEDNESS AND CONTINGENT LIABILITIES OF THE GROUP

3. WORKING CAPITAL STATEMENT

APPENDIX I

4. MATERIAL ADVERSE CHANGE

5. FINANCIAL AND TRADING PROSPECTS

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

(i) Interests of Directors and chief executives of the Company

(a) Long position in the shares of the Company:

(b) Long position in the shares of associated corporations

(ii) Interests of substantial shareholders

3. DIRECTORS’ SERVICE CONTRACTS

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

5. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

6. MATERIAL ADVERSE CHANGE

7. MATERIAL CONTRACTS

8. CLAIMS AND LITIGATION

9. GENERAL

10. DOCUMENTS AVAILABLE FOR INSPECTION

NOTICE OF EXTRAORDINARY GENERAL MEETING

ORDINARY RESOLUTION

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 December 2020

Notes:

NOTICE OF EXTRAORDINARY GENERAL MEETING

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GCL Technology Holdings Limited Proxy Solicitation & Information Statement 2020