CGN Power seeks USD3.2b in biggest Hong Kong IPO in 2 years

The stand of China General Nuclear Power Group (CGN) is seen during a fair in Fuzhou city, southeast China’s Fujian province

CGN Power Co., China’s biggest producer of nuclear energy, is seeking as much as USD3.2 billion in what could be the largest initial public offering in Hong Kong in two years.
The Shenzhen-based company is offering 8.83 billion shares at HK$2.43 (31 cents) to HK$2.78 each, according to a term sheet obtained by Bloomberg News. CGN Power began taking orders yesterday and plans to start trading on Dec. 10, the terms show.
CGN Power is raising money to build new stations as China curbs coal use in favor of cleaner energy sources to reduce pollution. Chinese companies are fueling a revival of Hong Kong’s IPO market even after Alibaba Group Holding Ltd. opted for a U.S. listing, with proceeds this year on pace to reach the highest since 2011, data compiled by Bloomberg show.
Part of CGN Power’s IPO proceeds will be used to increase the company’s stake in the Taishan nuclear project and construct stations, the terms show. The company may sell an additional 1.32 billion shares by exercising an overallotment option, according to the terms.
GIC Pte, Singapore’s sovereign wealth fund, plans to buy about $100 million of stock as a cornerstone investor, the terms show. The company will set aside about $1.33 billion of shares for 18 such investors including Och-Ziff Capital Management Group LLC and Hong Kong power provider CLP Holdings Ltd.
Also among the cornerstone investors are China Development Bank, Yangtze Power, Southern Power Grid, Chow Tai Fook, Value Partners, E Fund, Hillhouse and North Industries Group, the terms show.
China plans to add 8.6 gigawatts of nuclear power capacity this year, the National Energy Administration said in a Jan. 20 statement.
At the top end of the range, CGN Power’s sale would top the $3.1 billion raised by HK Electric Investments in January, according to data compiled by Bloomberg. It would be the largest first-time share sale since People’s Insurance Co. Group of China Ltd. completed a $3.6 billion IPO in December 2012. Fox Hu, Bloomberg