GCL Technology Holdings has set up a CNY2.06 billion ($287 million) partnership to acquire a 42.5% stake in Inner Mongolia Xinyuan Silicon Material Technology, a move that could signal emerging consolidation in China’s polysilicon sector.
Chinese polysilicon manufacturer GCL Technology Holdings Ltd. will set up a limited partnership worth CNY 2.06 billion to acquire a 42.5% stake in Inner Mongolia Xinyuan Silicon Material Technology Co., Ltd., leaving the granular silicon maker a non-wholly owned subsidiary, according to a statement to the Hong Kong Stock Exchange this week.
The move appears to indicate increasing consolidation pressure in China’s polysilicon sector, in line with recent reports showing that China’s six largest polysilicon producers are developing a $7 billion plan to reduce oversupply and stabilize prices.
The partnership, formed with China Cinda Asset Management Co. Ltd. and other investors, will buy equity stakes from Hongyuan Green Energy and Tibet Ruihua for CNY 2.01 billion. Cinda, as a limited partner, will contribute CNY 1.3 billion, while GCL Suzhou will add CNY 760 million. Smaller contributions will come from three general partners, including GCL Xuzhou.
The transaction, announced after trading hours on December 8, qualifies as a disclosable and connected transaction under Hong Kong’s listing rules, but is exempt from shareholder approval. GCL said the terms were fair and reasonable, with the approval of the board of directors, including independent directors.
The deal comes as China’s top six polysilicon producers are reportedly considering a $7 billion consolidation plan to reduce overcapacity and stabilize prices. Analysts have said such moves could potentially increase demand for wafers and push up prices across the solar supply chain.
Ru Jialin, director of the international cooperation department at the China Photovoltaic Industry Association (CPIA), said pv magazine Last week, the Chinese government made clear that market players want to solve the overcapacity problem themselves, but declined to comment immediately on reports of consolidation pressure.
“We advocate market-oriented ways to solve the problem,” Ru said on the sidelines of the recent China-EU Solar & Energy Storage Industries Dialogue 2025 in Dusseldorf, Germany. “I think the most effective way is to follow the market trend.”
GCL, one of the country’s largest suppliers of polysilicon and wafers, reported that the target company had revenues of CNY4.79 billion in 2024 but a net loss of CNY605 million.
Cinda will receive a fixed annualized return of 6.5% on its investment, with repayment obligations borne by GCL’s subsidiary Zhongneng, according to the exchange listing. The partnership’s financial results will be consolidated in GCL’s accounts until certain triggering events occur, GCL Technology said.
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