GCL Intelligent Energy Plans Reverse Merger With Xiake Color Spinning to List
Liao Shumin
/SOURCE : Yicai
GCL Intelligent Energy Plans Reverse Merger With Xiake Color Spinning to List

(Yicai Global) Nov. 6 -- Xiake Color Spinning plans to take a 90 percent stake in GCL Intelligent Energy via major asset swaps and share issues, it said in a major asset restructuring plan it released yesterday.

Wuxi, Jiangsu province-based Xiake Color Spinning plans to exchange its assets for CNY269 million (USD39 million) in a swap with Suzhou, Jiangsu province-headquartered GCL Intelligent Energy for 90 percent of the latter's shares at a price of CNY4.7 billion (USD680 million), with the difference settled through a share issue. GCL will then go public through a reverse merger with Xiake [SHE:002015] after the deal.

Founded in 2009, GCL Intelligent Energy's main business is clean energy and includes investment to develop natural gas power generation, distributed energy, waste incineration power generation, wind power generation, and electricity distribution network projects.

As the holder of the Hong Kong-headquartered Golden Concord Holdings' clean energy assets, GCL Intelligent Energy has trodden a difficult path on the road to listing. It has failed to go public through either a reverse merger or an initial public offering despite two attempts. This asset restructuring via Xiake is GCL's third shot at an A-share listing after it tried with Xiake but failed in 2017 after seeking a 2016 public offering on the mainland, also in vain. Unlike the planned listings of two years ago, however, the RM target Xiake is now already under GCL's control.

GCL signed share transfer agreements with Shanghai Dunde Equity Investment and Ningbo Hongyue Investment Management Center, the two largest shareholders of Xiake on Oct. 26, last year and Jan. 12, respectively, to transfer their 21.5 percent equity in Xiake to GCL. 

The equity transferred was registered in February this year and Xiake's actual controller changed to Zhu Gongshan, the head of GCL, after which the core positions of its management fell into hands of GCL executives, who must now be trusting to the old Chinese adage 'third time lucky.'

Editor: Ben Armour

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Keywords: Backdoor Listing , Xiake Color Spinning Co. , GCL Intelligent Energy , Golden Concord Holdings Limited