China Datang Unit Stakes to Sell for $260 Million

Dec. 6 (Bloomberg) -- Seven key investors will pay a total of $260 million for shares in the renewable-energy unit of China’s second-biggest power producer, according to the prospectus for the company’s Hong Kong initial public offering.

China Power International Holding Ltd. will buy a $10 million stake in China Datang Corp. Renewable Power Co., while Thomas Lau, brother of Hong Kong billionaire Joseph Lau, will take a $20 million share, the prospectus shows.

The renewable-energy unit of China Datang Corp. is targeting capacity of at least 20,000 megawatts in 10 years by developing wind, solar and biomass projects. Datang Renewable plans to raise HK$6.8 billion ($876 million) in its share sale on Dec. 17, adding to the record $49 billion raised in Hong Kong IPOs this year, according to data compiled by Bloomberg.

The China Datang unit aims to boost its wind-power capacity by about 2,000 megawatts annually in the next six years, President Hu Yongsheng told reporters in Hong Kong today.

The world’s largest polluting nation wants at least 15 percent of its energy to come from renewable sources including wind by 2020. China erected more wind turbines in 2009 than any other country and may install a record 18,000 megawatts of wind-power capacity this year, according to Bloomberg New Energy Finance estimates.

Datang Renewable’s wind-power capacity may rise to 4,000 megawatts by the year-end from 2,717 megawatts in June, according to Hu. Capacity may increase to as much as 6,000 megawatts by the close of 2011, he said.

Renewable-Energy IPOs

Aluminum Corp. of China Ltd. and Angang New Co. will each buy a $50 million stake in Datang Renewable, according to the prospectus. State Grid Corp. of China and China Yangtze Power Co. will also purchase $50 million shares, the prospectus shows.

China Everbright Ltd., UBS AG, Credit Suisse Group AG, JPMorgan Chase & Co. and Macquarie Group Ltd. are managing the share sale.

China Huaneng Group Corp., China Datang’s bigger rival, plans to raise as much as $1.3 billion in the IPO of its renewable energy unit in Hong Kong, according to a term sheet sent to investors on Nov. 29.

To contact the reporters on this story: Fox Hu in Hong Kong at fhu7@bloomberg.net; Ying Wang in Beijing at ywang30@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.