November 26, 2019 / 12:04 PM / 10 days ago

China's SDIC Power seeks London listing to invest in clean energy

LONDON (Reuters) - Chinese power generation group SDIC Power Holdings (600886.SS) plans to offer global depositary receipts in London, it said on Tuesday, adding it will look to use the proceeds to invest further in clean energy and for global expansion.

FILE PHOTO: A power station of the State Development & Investment Corporation (SDIC) is reflected in a lake in Tangshan, Hebei province, China, August 22, 2018. REUTERS/Thomas Peter

The Shanghai-listed company said the London offering, which is being made under a link between the London and Shanghai bourses announced earlier this year, will represent up to 10% of the total ordinary share capital of the company.

SDIC Power has a market capitalisation of 57.92 billion Chinese yuan (£6.39 billion) on the Shanghai exchange, suggesting a deal size of around $820 million for the London offering, prior to any potential discount.

The deal would be the second of its nature, after Chinese brokerage Huatai Securities listed in London in June this year, raising about $1.5 billion in the process.

It represents a boost for the London Stock Exchange, which has seen a number of initial public offerings (IPOs) cancelled or postponed due to market uncertainty in recent months.

Reuters reported in July that SDIC had hired banks to list in London via the Shanghai-London Stock Connect scheme, in a boost for Britain’s status as a financial centre ahead of Brexit.

The listing will help the company invest more in alternative energy, as it makes the transition from a coal-fired power focused company to a generator of clean energy, it said.

“We believe that a flotation on the London Stock Exchange will support our growth strategy, through which we will increase our clean energy capacity and continue our global expansion,” SDIC’s chairman Zhu Jiwei said in a statement.

Listings of this nature usually run for about four weeks, including two weeks of pre-marketing — in which analysts present company research to investors — and two weeks of roadshows, in which investors can put in orders.

A source familiar with the transaction said this process could be accelerated in the case of SDIC to make sure the deal prices comfortably before the Christmas break.

Goldman Sachs, UBS and HSBC are the joint global coordinators on the transaction.

Reporting by Abhinav Ramnarayan, editing by Louise Heavens and Emelia Sithole-Matarise

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