Business

Thursday June 21, 2012

Huadian Fuxin of China prices share offering at bottom


HONG KONG: China's Huadian Fuxin Energy Corp raised about US$319mil in a Hong Kong initial public offering (IPO), pricing the city's second biggest offering of the year at the bottom of the indicative range as investors remain wary of new listings.

The company was among only a few to complete an IPO in Hong Kong in the past weeks, sealing the deal just days after an election in Greece that eased some of the global equities markets' worries over the European debt crisis.

Confronted with increased volatility in markets around the world, companies have pulled or postponed a series of deals, including a US$1bil Hong Kong listing by high-end jeweller Graff Diamonds and a US$3bil Singapore offering by motor racing business Formula One.

Huadian Fuxin's IPO is Hong Kong's largest since a US$580mil deal by oil explorer Sunshine Oilsands Ltd in February. The smaller size of IPOs this year underscores the difficulty bankers and firms have faced in convincing investors to buy into equity markets.

Huadian Fuxin sold 1.5 billion new shares at HK$1.65 each, near the bottom of a HK$1.601.76 per share price range, according to a term sheet of the IPO seen by Reuters yesterday. The deal totalled HK$2.48bil (US$319mil).

Six cornerstone investors, including turbine maker Sinovel Wind Group and a unit of General Electric, bought nearly 60% of the IPO, as investment banks increasingly seek to make deals foolproof by covering most of the demand before their launch.

Huadian Fuxin is a diversified energy company with hydropower projects and coal-fired power plants in South China's Fujian province, and wind power and clean energy projects throughout China.

The company will make its debut on the Hong Kong stock exchange on June 28. - Reuters

  • E-mail this story
  • Print this story
  • Bookmark and Share