CGN Power seeks to raise HK$24.5 billion in biggest Hong Kong IPO of the year
CGN Power, the mainland’s largest nuclear power company by capacity, is looking to raise HK$24.52 billion in pricing its initial public offering on Tuesday, sources told Reuters, making the IPO the largest in Hong Kong so far this year.
The IPO was nearly 300 times oversubscribed with HK$350 billion yuan in subscriptions, the eighth highest in Hong Kong history, local media reported.
The company, which runs the Daya Bay nuclear plant near Shenzhen, will list on December 10.
CGN had secured orders from Singapore’s sovereign wealth fund GIC, US hedge fund manager Och-Ziff Capital, China Life Insurance and China Development Bank as well as distressed asset manager China Cinda, after expanding its syndicate team to assist in the share sale, sources told the South China Morning Post in November.
The three IPO sponsors – Bank of America Merrill Lynch, China International Capital Corp (CICC) and ABC International, the investment arm of Agricultural Bank of China – were joined on the sales force by CLSA, Morgan Stanley, Goldman Sachs and JPMorgan as book-runners.
Nuclear energy, which represents less than 1 per cent of the mainland’s electricity production, has delivered an internal rate of return of 17 per cent, which is higher than other forms of renewable power generation, according to a Credit Suisse report.
Beijing is targeting nuclear power generation capacity of 58 gigawatts by 2020, up from an installed capacity of 19 gigawatts in September.
Renewable energy now accounts for less than 10 per cent of the mainland’s total energy production.