China's Ming Yang in Pact for Going Private Amid Price SlumpBloomberg News
Third Chinese clean-energy company planning to go private
Investor group, including CEO, offering to pay 24% premium
China Ming Yang Wind Power Group Ltd.agreed to be taken private for about $408 million by a group of investors including Chief Executive Officer Zhang Chuanwei, the third example in the past year of a major Chinese renewable energy company seeking to abandon its Wall Street listing.
American depositary receipts for China’s third biggest wind-turbine maker rose the most in more than six months.
The company said the group will pay $2.51 in cash for issued and outstanding ADRs it doesn’t already own. This represents a premium of about 24 percent to Tuesday’s close of $2.03.
China’s renewable-energy companies have watched their shares slump even as profit rebounded and installations surged to a record, both in the solar and wind industries. The founders of Trina Solar Ltd., the world’s biggest maker of photovoltaic panels, and JA Solar Holdings Co., are also working on going private.
Ming Yang’s ADRs peaked at $14.48 in October 2010 after an initial public offering a month earlier. The company’s ADRs, each worth one ordinary share, rose 15 percent to $2.33 at the close in New York., the most since July 9.
Given its profitability, Ming Yang “may consider going back to a market that can offer it a higher value," said Zhou Yiyi, an analyst from Bloomberg New Energy Finance in Shanghai.
Ming Yang said the investor consortium also includes the CEO’s affiliates, Dajun Guangcheng (Shanghai) Capital Fund I and Guangzhou Huifu Kaile Investment LP. It will fund the offer with cash contributions of $124 million from the investors and debt financing of as much as $106 million provided by the Guangdong branch of China Construction Bank Corp.
The deal is due to close during the first half of the year, subject to the approval from shareholders representing at least two-thirds of the voting power, Ming Yang said. CEO Zhang Chuanwei and other shareholders, who account for about 44 percent of the voting rights, already have approved the offer.
— With assistance by Feifei Shen