CLP Holdings in HK$7.7 billion share offer for investment needs

PUBLISHED : Thursday, 13 December, 2012, 12:00am
UPDATED : Thursday, 13 December, 2012, 4:57am

Hong Kong's largest electricity supplier, CLP, is raising up to HK$7.687 billion through a placement of new shares to fund its investment needs in the city, a term sheet seen by the South China Morning Post shows.

The company, controlled by the Kadoorie family, is planning to sell 120.3 million shares at a price range of between HK$62.90 and HK$63.90 per share, the document showed.

This represents a discount of between 4.91 per cent and 6.4 per cent to the stock's close of HK$67.20 yesterday, after it fell 0.3 per cent.

The term sheet states that CLP intends to use the net proceeds to enhance its core operating business in Hong Kong by, for example, building infrastructure related to gas supply from the mainland and boosting its generating capacity in existing markets, such as expanding its Fangchenggang power plant in Guangxi province.

It also plans to allocate funds to the development of renewable-energy projects.

CLP refused to comment on the deal last night.

The company also has power stations and energy assets in Taiwan, India, Vietnam and Australia.

The energy producer's Australian unit TruEnergy is planning a share flotation next year, although the company is also weighing up separate financing options to grow its Australian business.

CLP has a market value of US$20.9 billion, based on yesterday's close.

The Kadoories also control Hongkong and Shanghai Hotels.

The family's estimated net worth is US$6.6 billion, according to Forbes magazine.

The share offer came just a day after CLP Power proposed to raise its tariff by an average 5.9 per cent next year.

Its per-unit price will go up from 98.7 HK cents to 104.5 HK cents.

But users will get a rebate of seven to nine HK cents a kilowatt-hour if they can keep their consumption below 400 kilowatt-hours during a two-month billing period.

CLP Power warned that its fuel costs will increase by HK$2.3 billion to HK$12 billion, as it uses higher-priced gas.

Its rival, Hongkong Electric, controlled by Li Ka-shing, proposed to raise its tariff by 2.9 per cent.

Goldman Sachs, JP Morgan and UBS are the joint bookrunners for the placement, the term sheet shows.

Additional reporting by Ray Chan and Reuters