China Power International shares plunge on rights issue-financed clean energy assets purchase

Shares of China Power International Development (CPID), one of two Hong Kong-listed units of state-owned State Power Investment Corp, tumbled about 6 per cent after it announced it would buy a basket of clean energy assets from the parent for 5 billion yuan in a deal partly financed by a rights share issue.

CPID has agreed to pay 4.97 billion yuan to buy hydro, natural gas, wind and solar power projects with total capacity of 1,994 megawatts (MW) and projects under construction of 1,875MW.

The projects are located in the provinces of Guangdong, Anhui, Hubei and Shandong, as well as the Guangxi Zhuang autonomous region.

“The acquisitions will further shift the company’s power generation portfolio towards a higher proportion of clean energy assets,” the company said in a filing to Hong Kong’s stock exchange late on Monday.

They will lift CPID’s installed capacity – as calculated by its stake ownership – by 11.8 per cent to 18,837.8MW, and raise clean energy’s contribution to its total capacity to 32.9 per cent from 25 per cent, it said.

When all the projects under construction are completed, the contribution ratio will rise further to 40 per cent, it added.

CPID shares traded 5.7 per cent lower at HK$2.46 at 2:10pm on Tuesday, having dipped 6.1 per cent at one point earlier in the trading session.