S&P snips GCL New Energy

S&P said it downgraded GCL New Energy Holdings Ltd.’s to B- from B+ citing a weakened credit profile and lowered the rating on its senior unsecured notes to CCC+ from B-.

“We lowered the rating on GCL New Energy Holdings Ltd. (GNE) to reflect the weakened liquidity at the group credit profile level, and our view that GNE’s creditworthiness will be impaired and constrained by its parent GCL-Poly Energy Holdings Ltd. We believe the cash generation and liquidity of GCL-Poly has materially deteriorated in the past year due to a weakened solar material industry. Its outstanding debt has hovered at a high level, especially the high mix of short-term debt,” said S&P in a press release.

GCL-Poly has about RMB 16.3 billion of debt, excluding GCL New Energy’s, due by next June.

The outlook is negative.

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