CGN Power Said to Draw GIC, Och-Ziff to $3 Billion Hong Kong IPOFox Hu
CGN Power Co., the Chinese nuclear energy producer, won commitments from GIC Pte and Och-Ziff Capital Management Group LLC to invest in its $3 billion initial public offering, people with knowledge of the matter said.
GIC, Singapore’s sovereign wealth fund, agreed to buy about $100 million of stock in the company’s Hong Kong share sale, the people said. Hong Kong power provider CLP Holdings Ltd. has also committed to invest in the IPO, along with China Reinsurance (Group) Corp. and China Cinda Asset Management Co., they said, asking not to be named as the details are private.
CGN Power, the nation’s biggest producer of nuclear energy, is building new stations in China as the government fights pollution by curbing coal use in favor of cleaner electricity sources. The country plans to add 8.6 gigawatts of nuclear power capacity this year, the National Energy Administration said in a Jan. 20 statement.
The Shenzhen-based power producer plans to set aside about $1.2 billion of shares for so-called cornerstone investors, who typically agree to hold on to their stock for six months in return for guaranteed allocation in the offering, the people said. CGN Power is gauging demand for the sale and plans to start taking orders next week, according to the people.
China Life Insurance Co., China Development Bank Corp. and China Minmetals Corp. also agreed to buy shares in the offering, the people said. The list of cornerstone investors hasn’t been finalized and may still change, according to one of the people.
A Hong Kong-based external spokeswoman for CGN Power declined to comment. GIC declined to comment in an e-mailed statement.
CGN Power will use some of the IPO proceeds to increase its stake in the Taishan nuclear power project and build new stations, according to a Nov. 16 filing. ABCI Securities Co., Bank of America Corp. and China International Capital Corp. are joint sponsors of the IPO, the filing shows.