CGN Power raises US$3.2b in IPO
Print Edition
CGN Power Co, China’s largest nuclear power producer, raised US$3.2 billion after pricing its Hong Kong initial public offering at the top of expectations amid a scramble to invest in a sector primed for growth as China promotes atomic energy.
The 8.82 billion new shares on offer were priced at HK$2.78 each after being marketed in an indicative range of HK$2.43 to HK$2.78, Thomson Reuters publication IFR reported yesterday, citing people familiar with the company’s plans.
That would value the offering at HK$24.52 billion (US$3.2 billion), the second-largest in the Asia-Pacific region so far this year. A listing by Chinese property developer Dalian Wanda Commercial Properties Co, expected later this month, could be worth up to US$6 billion.
As a nuclear energy provider, CGN Power is set to benefit from China’s efforts to curb environmental pollution by diversifying its energy generation away from fossil fuels. In a draft IPO prospectus, it said it plans to use proceeds partly to expand installed capacity with nine new power generating units.
CGN Power said it expects China’s installed capacity for nuclear power to surge to 128 gigawatts by 2030 from 16GW in 2013. The company sees its own output more than doubling to 24,970 megawatts by 2019 from 11,624MW in 2014.
“China pollution is very serious today and nuclear power may become a main source of energy in the future to help lower the pollution,” said Jasper Chan, corporate finance officer at Hong Kong brokerage Phillip Securities.
The company received commitments worth US$1.33 billion from 18 ‘cornerstone’ investors, helping secure demand for the deal before it was launched to retail and other institutional buyers. The shares debut in Hong Kong next Wednesday.
The CGN deal comes ahead of Dalian Wanda and a planned IPO of up to US$1.5 billion from BAIC Motor Corp Ltd, part-owned by Germany’s Daimler AG, before the end of this year.
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