Huaneng revives $1bn IPO

CHINA: Huaneng Renewables, the renewables division of China’s biggest power company Huaneng, is planning to restart its Hong Kong Stock Exchange IPO on June 9 with an aim of raising $1 billion.

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Huaneng Renewables, the third largest wind project operator in China, after Longyuan and Datang Renewables, will list its stocks at a price of HK$2.32-3.09 ($0.28-0.29) per share for the IPO.

The listing sponsors are Morgan Stanley and Macquarie. Road shows will officially start at the end of this month. The funds will be used to push forward development of wind power projects.

This price range, however, has been slashed substantially from that of last December, apparently in an attempt to ensure a successful float.

In December, it planned to raise about 8.2 billion HK dollars (1.05 billion U.S. dollars) on the Hong Kong Stock Exchange, priced at HK$2.98-3.98 per share.

Huaneng Renewables shelved its IPO at the last minute, citing seriously underestimated valuation amid market fluctuations as the reason for the postponement.

Fellow developer Datang Renewables, China’s second largest wind operator, pressed ahead with the IPO plan in the same month, despite difficult stock market conditions. Datang Renewables raised only $642 million, at the bottom of the price range.

Industry officials said Huaneng Renewables chooses to restart its IPO at this time, because investors are becoming more optimistic on the Chinese wind power industry.

Chinese wind power operators are enjoying an improved trading environment, due to falling wind turbine prices and improved grid access capability.

To date, wind turbine prices have slumped to less than CNY4,000 yuan/kw from cNY6,200/kw in early 2008.

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