China National Nuclear Plans IPO in Shanghai to Fund Projects

China National Nuclear Power Co., the country’s second-largest operator of nuclear plants, plans to sell 3.651 billion shares in an initial public offering in Shanghai amid a government push for cleaner energy sources.

The state-owned company is looking to use 16.25 billion yuan ($2.6 billion) of the IPO proceeds to build four projects and replenish working capital, according to a draft prospectus posted yesterday on the China Securities Regulatory Commission’s website. It didn’t give a price range or set a fundraising target.

It’s the second IPO under consideration by a Chinese nuclear company this year. China General Nuclear Power Group, the country’s top producer of nuclear energy, plans to seek about $2 billion from a share sale in the second-half, two people familiar with the matter said in February.

China has 28 nuclear reactors under construction, more than any other country, according to the World Nuclear Association. The nation is looking to nuclear power to wean itself off coal and reduce pollution. It comes as some Asian nations weigh their future dependency on nuclear power.

Japan’s reactors have been shuttered in the wake of the 2011 Fukushima disaster. The government has committed to restarting some plants once safety checks have been completed, while at the same time reducing the nation’s nuclear dependency as much as possible, without setting targets. Nuclear accounted for almost a third of Japan’s electricity before the Fukushima accident.

Taiwan’s government agreed to demands by opposition lawmakers last week to mothball a nuclear power plant currently under construction. There’s also been some opposition in China to nuclear related facilities. In July, street demonstrations forced China’s Guangdong province to abandon plans for a $6 billion uranium-processing plant.

IPO Proceeds

China National Nuclear, currently building 12 reactors, will use the funds for four projects that are located in the more developed eastern and southern parts of the country. The projects will help ease an anticipated power shortage and increase the company’s installed capacity by 10.37 million kilowatts, it said.

Companies and their shareholders have raised $5.3 billion through IPOs in China’s domestic markets this year following a 15-month freeze, down 21 percent from proceeds for the same period of 2012, according to data compiled by Bloomberg. Regulators suspended first-time share sales from September 2012 to review listing rules.

The companies that completed IPOs in Shenzhen and Shanghai this year have surged on average 49 percent from their offer prices, after adjusting for deal sizes, data compiled by Bloomberg show. That compares with an 8.7 percent gain for initial offerings in the U.S., the data show.

China National Nuclear’s plan was submitted to the regulator on April 25 for approval, it said.

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