China's GCL New Energy defaults on USD 500m of notes

Chinese solar plants operator GCL New Energy Holdings Ltd (HKG:0451) on Monday announced a default on USD 500 million (EUR 413.4m) worth of 7.1% senior notes.

The existing notes matured on January 30, 2021, after the termination of an exchange offer with existing shareholders.

The company, which is a majority-owned unit of solar-grade polysilicon maker GCL-Poly Energy Holdings Ltd (HKG:3800), said in a bourse filing that the particular event will trigger a cross default under its other financial indebtedness. In turn, this will have a material negative impact on its business, results of operation and financial position going forward.

In its latest statement, GCL New Energy said it has not yet received a notice or request for the immediate repayment of its debts under other indebtedness.

As of end-June 2020, the company’s net current liabilities amounted to CNY 6.51 billion (USD 1bn/EUR 832m), according to its last interim report.

(USD 1.0 = EUR 0.827)

(CNY 1.0 = USD 0.155/EUR 0.128)

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