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New | Everbright to spin off Greentech unit via a Hong Kong IPO
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China Everbright International, one of the nation’s largest developers of waste-to-energy and water treatment projects, said it plans to spin off its Greentech business and raise between HK$2.9 billion and HK$3.3 billion (US$424 million) through a stock sale on the Hong Kong Stock Exchange.
Everbright plans to offer 560 million new shares at between HK$5.18 and HK$5.90 each, according to a filing to the stock exchange, valuing the company at up to HK$11.8 billion. That would make Everbright the biggest IPO by an alternative energy company in Hong Kong since 2009, when Longyuan Power Group Corp.’s US$2.6 billion offer, according to Bloomberg data.
“People were initially concerned that the green technology business in solar and wind projects will require a lot of investment and as a result cause very volatile returns,” said UOB Kay Hian’s strategist Hannah Li. “But the plans were already mostly priced in by the market previously, while the decision to spin off the greentech business may actually help improve Everbright International’s valuations in the medium to long term.”
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Everbright International’s core businesses in environmental protection and waste treatment are actually viewed quite positively, Li said.
The plans were already mostly priced in by the market previously, while the decision to spin off the greentech business may actually help improve Everbright International’s valuation in the medium to long term
Proceeds from the IPO could be used to finance Greentech’s investments in projects that use agricultural and forest by-products to generate electricity, according to a preliminary prospectus. Greentech’s projects are mainly located in Anhui and Jiangsu provinces.
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