August 17, 2010 / 7:06 AM / 10 years ago

Two China new energy firms eye $2 billion in IPOs

HONG KONG (Reuters) - China Huaneng Group Corp and Datang Corp, the country’s top power producers, plan to float shares of their renewable energy units in Hong Kong in offerings that could raise over $2 billion, sources close to the deals said on Tuesday.

A cyclist rides past a China Huaneng Group power plant in Beijing on August 17, 2005. REUTERS/China Newsphoto

The deals are unfolding as China aggressively develops its renewable energy sector and the nation’s biggest power firms look to boost investment in the industry to drive future growth.

Huaneng’s renewable energy unit, Huaneng New Energy Industrial Co., plans to raise $1 billion to $1.5 billion in an initial public offering as early as October, sources close to the deal said on Tuesday.

China Datang Corp, the country’s second-largest power producer, also plans to float shares of its renewable energy unit in a Hong Kong IPO as early as December, sources familiar with the deal said.

“The market still has appetite for new energy listings,” said Patrick Yiu, a director at CASH Asset Management.

“Depending on the valuations, renewable enery shares may still be attractive given expectations of growth in the industry.”

The wind power unit of China Huaneng Group plans to issue no more than 2.9 billion shares in Hong Kong at between 3 to 4 yuan per share, China Daily said, citing a source familiar with the matter.

In February, Reuters reported that China Huaneng Group planned to float shares of its wind power unit, aiming to raise $1 billion from a Hong Kong initial public offering this year.

China International Capital Corp (CICC), Goldman Sachs, Macquarie and Morgan Stanley were handling the IPO for Huaneng’s wind unit, sources said.

Datang is planning to spin off China Datang Corp Renewable Power Co Ltd, which holds its wind and hydro assets.

Datang’s IPO is being handled by Deutsche Bank and


Datang Corp’s spinoff plan has already obtained approval from China’s National Energy Administration, the China Securities Journal reported in June.

The reported offerings come after China’s second-largest wind turbine maker, Xinjiang Goldwind Science & Technology Co, pulled its up to $1.2 billion IPO in June because of fragile investor sentiment and concerns about overcapacity in the sector.

IFR reported the wind company may relaunch its Hong Kong float as early as next month if market conditions improve.

Goldman Sachs has joined the deal in place of Credit Suisse, while the other two bookrunners, CICC and Citigroup, remain, IFR said.

China is now the world’s largest market for wind power after it more than doubled its wind generation capacity to 25 gigawatts last year. The nation’s unofficial target for wind capacity is at 100 to 150 GW by 2020, possibly attracting investments of over $150 billion, according to analysts.

Additional Reporting by Leonora Walet; Editing by Jonathan Hopfner

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