The China Securities Regulatory Commission (CSRC) has announced that it has decided to cancel Wednesday’s planned meeting to examine the IPO of Sinovel, because "related issues need to be further checked."
Sinovel was unable to comment.
Sinovel planned to issue 105.1 million shares on the Shanghai Stock Exchange, which would account for 10.46% of the total equities after the expansion, to raise CNY3.447 billion.
The funds are expected to be invested in the development of 3MW and higher capacity wind turbines. This includes a 3MW offshore and onshore project, offshore wind turbine assembly and a transportation base project.
Sinovel, established in February 2006, has grown to become China’s biggest wind turbine producer over the past two years.
In 2008, Sinovel made a pledge to its investors that it would be listed within three years. In March this year, the company submitted an application to CSRC for listing on the Shanghai Stock Exchange. On August 17, it passed a pre-qualification inquiry.
According to China Wind Energy Association (CWEA), Sinovel’s market share in China has grown by 20.57 percent in 2007, 22.45 percent in 2008, and 25.32 percent in 2009.
However, this rapid expansion has come at a price. In the first half of 2010, Sinovel had CNY18.28 billion debts, making the assets-liability ratio reach 85.04% . In 2009, the company had CNY14.41 billion debts, with 84.9% assets-liability ratio. This debt level is much higher than Goldwind’s 50% assets-liability ratio.