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Huaneng Renewables Said to Raise $800 Million in Hong Kong

Huaneng Renewables Corp., the wind-power unit of China’s biggest electricity producer, raised HK$6.23 billion ($800 million) in a Hong Kong initial public offering, two people with knowledge of the matter said.

The arm of China Huaneng Group Corp. sold 2.49 billion shares at HK$2.50 apiece, near the midpoint of a range marketed to investors, said the people, who asked not to be identified because the information is private. The deal was offered at HK$2.28 to HK$2.98 a share in the prospectus for the sale.

The IPO’s success reflects China’s emergence as the world’s biggest wind-energy market by installed capacity, having overtaken the U.S. last year, Global Wind Energy Council data show. At the end of 2010, China had a total of 42.3 gigawatts of wind power capacity compared with 40.2 gigawatts for the U.S.

The Asian nation also last year exceeded the U.S. as the most attractive place to carry out renewable-energy projects, according to a ranking produced by Ernst & Young LLP. The Chinese government wants at least 15 percent of the country’s energy to come from renewable sources, including wind, by 2020.

Investors paid about 14.2 times Huaneng Renewables’ forecast 2011 earnings, the people said. That’s between China Datang Corp. Renewable Power Co.’s trading price of 16.7 times estimated 2011 profit and Xinjiang Goldwind Science & Technology Co., which trades at a multiple of 12.6, according to data compiled by Bloomberg.

False Start

The Beijing-based company plans to start trading on June 10. Huaneng Renewables scrapped an earlier listing plan because of unexpected and excessive market volatility, the company said on Dec. 13.

Morgan Stanley, China International Capital Corp., Goldman Sachs Group Inc. and Macquarie Group Ltd. managed the IPO, the prospectus shows.

China Datang Corp. Renewable, the wind unit of the nation’s second-largest power producer, raised HK$5 billion ($643 million) in a Hong Kong initial public offering in December. The shares have since fallen 5.2 percent, based on yesterday’s close of HK$2.21.

Beijing Jingneng Clean Energy Co., an operator of gas-fired power plants in China’s capital, is seeking as much as $700 million in a Hong Kong IPO, people with knowledge of the matter said on May 12. The unit of state-owned Beijing Energy Investment Holding Co. aims to start trading in June, the people said.

Key Investors

China Investment Corp., Temasek Holdings Pte and General Electric Co. are among key investors who agreed to buy a combined $415 million of stock in Huaneng Renewables’ IPO, the prospectus shows. The Chinese sovereign wealth fund subscribed for $60 million of shares, while Temasek, Singapore’s state investment company, agreed to invest $50 million, the document shows.

Turbine prices dropped about 5 percent in the first quarter from the previous three months to an average of 3,797 yuan ($586) per kilowatt, according to New Energy Finance.

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