Huaneng Renewables Corp, which holds among China’s largest wind assets, pulled its up to $1.28 billion initial public offering as a stalemate at the U.N. climate talks and a weak Hong Kong market hurt investor appetite.
Its peer, China Datang Corp Renewable Corp, priced its Hong Kong offering at HK$2.33, representing the low end of an earlier indicated range raising about $640 million, a source familiar with the deal said.
Datang originally aimed to raise up to $1.5 billion from its Hong Kong IPO. A total of 2.14 billion shares were sold, the source added.
“Failure of world leaders at Cancun to agree on extending the Kyoto Protocol casts shadows on carbon markets and worried investors about the prospect of Chinese renewable firms,” said Yuanta Research analyst Min Li.
Carbon offset markets worth $20 billion last year depend on Kyoto emission caps to drive developed countries to pay for cuts in greenhouse gases in developing nations.
China is among the biggest beneficiaries of the Kyoto pact as its companies earn U.N. credits for helping prevent the release of carbon dioxide in the atmosphere by building clean energy projects.
World leaders at recently-concluded climate talks in Cancun delayed the task of extending the Kyoto pact until next year’s talks in South Africa. Kyoto expires in 2012.
Weak market conditions were also blamed for the lackluster response to offerings.
“In light of the change in market conditions and recent unexpected and excessive market volatility … the company has formed the view that it would be inadvisable to proceed with the global offering at this time,” Huaneng said in a filing to the Hong Kong stock exchange.
Application monies would be refunded in full without interest, the company said.
Huaneng Renewables had aimed to raise as much as HK$9.9 billion ($1.3 billion).
(US$1=HK$7.75)
