Grandall, Freshfields and Milbank advise on GCL-Poly’s US$3.4bn green acquisition

Driven by government policies to tackle climate change, the green technology industry is thriving in China and is attracting billions of dollars of investments into energy efficiency and renewable energy. Hong Kong listed GCL-Poly Energy, a leading integrated green energy enterprise in China, has expanded its green portfolio by acquiring Jiangsu Zhongneng Polysilicon Technology Development for US$3.4bn. Jiangsu Zhongneng is the main operating entity of GCL Solar Energy Technology in the PRC.

GCL-Poly acquired, by way of allotment and issuance of new shares, 100% equity interest in Jiangsu Zhongneng. In connection with the acquisition, GCL-Poly also made an allotment and issue of new shares worth US$350m and one of its subsidiaries obtained loan facility of US$300m. In addition, it placed new shares worth more than HK$3.5bn. Grandall's Beijing managing partner, Wang Weidong, advised on GCL-Poly on its acqusition and share issuance, allotment, share placement and loan facility.

Feshfields Bruckhaus Deringer represented GCL-Poly on the acquisition and Milbank, Tweed, Hadley & McCloy, led by partner Doug Tanner, acted for the target company. Major shareholders of Jiangsu Zhongneng, Balderton Capital and Trust Bridge, appointed Paul, Hastings, Janofsky & Walker to represent them on the sale of their shares.

“China has undergone unprecedented economic development in the past three decades. Supply of conventional sources of energy cannot keep up with rising demand,” said Zhu Gongshan, chairman and executive director of GCL-Poly. Before the acquisition, GCL-Poly Energy had 18 cogeneration power plants, one incineration power plant and one windpower plant.

Milbank said there is no question that there will be a consolidation in the solar power industry in China. In addition to M&A, Milbank is expecting more IP and finance work as the industry expands.

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