China General Nuclear Power appoints two banks for US$2b IPO

PUBLISHED : Wednesday, 12 February, 2014, 12:50am
UPDATED : Wednesday, 12 February, 2014, 12:50am

China General Nuclear Power Group, the nation's biggest nuclear energy company by installed capacity, has picked China International Capital Corp and Deutsche Bank to arrange an initial public offering in Hong Kong, two sources said.

The Shenzhen-based firm planned to seek about US$2 billion from the share sale in the second half of this year, they said.

General Nuclear might consider selling shares in the mainland's domestic stock market after the Hong Kong listing, one source said.

Beijing-based rival China National Nuclear Corp had prepared for a Shanghai initial public offering in 2012 but the flotation has not been realised.

General Nuclear is seeking funds to expand as the mainland seeks to curb coal consumption in favour of cleaner energy to fight air pollution.

The mainland planned to add 8.6 gigawatts of nuclear power capacity this year, the National Energy Administration said last month. That is almost equal to Britain's yearly nuclear power capacity.

The company's installed nuclear power generating capacity stood at 8.3GW at the end of last year, or 56 per cent of the mainland's total. Facilities being built will add 18.8GW.

It also has 4.7GW of wind power capacity, 0.6GW of solar power capacity and 1.47GW of hydropower capacity, as well as a uranium mining and procurement unit with projects both in mainland China and overseas, including Namibia in Africa.

General Nuclear operates the Daya Bay nuclear power plant in Shenzhen, which supplies part of Hong Kong's power needs.

Standard Chartered head of renewables and utilities equity research Evan Li said nuclear power was an essential part of the mainland's clean energy development and the industry's profitability was relatively steady, although volatile uranium prices were a risk factor.

Beijing resumed construction of nuclear power plants in late 2012 after a 19-month suspension of new project approvals during a thorough safety review of all projects following the earthquake-related nuclear disaster in Japan in March 2011.

Beijing has banned nuclear plants in inland regions, and set a less aggressive target of 58GW of installed nuclear power capacity and 30GW under construction by 2020.