China Huaneng Group Corp., the country’s biggest electricity producer, aims to raise as much as $1.3 billion in the initial share sale of its renewable energy unit in Hong Kong to increase output capacity and meet demand.
Huaneng Renewables Corp. is offering 2.5 billion shares for HK$2.98 to HK$3.98 apiece, according to terms sent to investors. The stock is due to go on sale in Hong Kong on Dec. 16, according to the term sheet.
A record $49 billion was raised in Hong Kong through initial public offerings so far this year, according to data compiled by Bloomberg. China Datang Corp., the nation’s second- biggest power producer, and Bluestar Adisseo Nutrition Group, backed by Blackstone Group LP, delayed IPO plans in the city last week because of market volatility.
“I’m a little bit surprised that they are pressing ahead with this share sale,” said Francis Lun, general manager at Fulbright Securities Ltd. in Hong Kong. “I don’t think there’s the appetite at the moment after we had two companies delay their share sales last week.”
The benchmark Hang Seng index has fallen 8.4 percent since the gauge hit this year’s high on Nov. 8, amid concerns the Chinese government will take additional measures to cool the economy and curb consumer prices that rose at the fastest pace in two years.
The Huaneng renewable energy unit has hired Morgan Stanley, Goldman Sachs Group Inc. and Macquarie Group Ltd. to manage the share sale, two people familiar with the matter said on Nov. 11.
Renewable Energy Demand
China, the world’s biggest polluter, wants at least 15 percent of its energy to come from renewable sources including wind by 2020. The nation erected more wind turbines in 2009 than any other country and may install a record 18 gigawatts of wind- power capacity this year, according to Bloomberg New Energy Finance estimates.
China Huaneng plans to have 20,000 megawatts of wind-power capacity by the end of the decade, or about 10 percent of its total estimated generating capacity by then, according to a company statement on May 25.
