Longyuan Power Said to Weigh $500 Million Share Sale
China Longyuan Power Group Corp. (916), the nation’s biggest wind-power producer, may raise about $500 million by selling shares in Hong Kong, three people with knowledge of the matter said.
Longyuan, which said in May that it would offer up to 1.36 billion shares in Hong Kong, is planning to offer about 813 million shares, two of the people said, who asked not to be identified because the information is private. The company’s advisers have been gauging investor interest in the offering this month, the people said.
The final timing of the sale hasn’t been decided, and will depend on Longyuan’s market price. At its closing price of HK$4.85 apiece yesterday, a sale of 813 million shares would raise about HK$3.9 billion ($503 million). The stock slipped 0.8 percent to HK$4.81 apiece as of 3:26 p.m. in Hong Kong trading today.
Secondary stock sales in Hong Kong have raised about $31 billion this year, almost 10 times the value of initial public offerings, data compiled by Bloomberg show. The largest additional sale this year was a $6 billion offering of shares in AIA Group Ltd. (1299), by American International Group Inc., the data show.
China Resources Gas Group Ltd. (1193) is also considering a stock sale to raise about HK$2.7 billion as early as today, after its stock rose to a record high yesterday, two people with knowledge of that plan said.
The Hong Kong-based gas distributor halted its shares from trading today in the city pending announcement of a share sale. The stock has surged 66 percent this year, closing yesterday at HK$18.46.
Longyuan, based in Beijing, said in May that it would use the share sale proceeds to fund new renewable energy projects, including wind farms, according to a filing to Hong Kong’s stock exchange. Its shares are down about 17 percent since the fundraising plan was announced on May 11.
“We aren’t in discussions with investors,” Lan Peizhen, Longyuan’s investor relations manager said by phone today. “We got approval for the share sale from shareholders in July and will choose a proper timing to implement it by July 2, 2013.”
China’s goal of deriving 15 percent of its energy from non-fossil fuels by 2020 is helping wind project developers to expand installed capacity. The nation added 20 gigawatts of wind farms in 2011, an 18 percent increase from a year earlier, according to Bloomberg New Energy Finance.
Longyuan increased its total installed wind-power capacity by about 23 percent to 10.6 gigawatts in 2011 from the previous year, the company said in March. Its third-quarter profit rose 30 percent to about 260 million yuan ($42 million), according to calculations based on nine-month results released this month. Sales from the wind-power business rose 43 percent to 1.7 billion yuan.
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