May 31 (Bloomberg) -- Canadian Solar Inc., a Chinese maker of solar panels, rose the most in more than two months after it formed a joint venture with GCL-Poly Energy Holdings Inc. to build a 600-megawatt solar wafer plant.
Canadian Solar rose 62 cents, or 6.7 percent, to $9.90 at 10:06 a.m. in Nasdaq Stock Market trading, the biggest intra-day gain since March 15.
The plant, which can be expanded to 1.2 gigawatts of annual capacity, will cost $77 million and will be financed 33.3 percent in registered capital and 66.7 percent in debt, Suzhou-based Canadian Solar said today in a statement. GCL, China’s largest polysilicon maker, will provide 90 percent of the equity and Canadian Solar will cover the remainder.
Canadian Solar expects the venture to reduce its manufacturing costs starting in the first quarter of 2012, Canadian Solar chairman and chief executive Shawn Qu said in the statement. The venture will “improve Canadian Solar’s gross margins, with a minimal capital expenditure requirement,” Qu said.
GCL-Poly rose 21 Hong Kong cents, or 5.3 percent, to HK$4.17 in Hong Kong, before the joint venture was announced.
GCL-Poly is the world’s third-largest maker of polysilicon used in solar cells and wafers. The Hong Kong-based company said in March it would more than double its polysilicon production capacity to 46,000 metric tons this year from a year earlier and raise wafer capacity by about 85 percent to 6.5 gigawatts.
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