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Chinese Utilities Wind IPOs fail to escape the Green Curse as Huaneng Scraps,Datang Scrapes

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Utilities trying to spinoff their Renewable Energy Subsidiaries have faced a very tough 2011 with many of the plans being scrapped.The Utilities which have managed to list have done so at much reduced valuations and have seen their stock prices erode after listing.Enel Green Power which was the biggest Green Utility to IPO in 2010 managed to to so after massive delays and lowering its stock price 2 times.Orient Green Power in Indian and First Wind Holdings of USA which were pureplay Green Utilities also saw very tough times with First Wind being forced to scrap its capital raising plans.China’s Datang and Huaneng Group which were planning to list their Green Subsidiaries in Hong Kong for a long time faced a big question as well.Both these large state owned utilities have huge wind power assets which are forecast to grow at a tremendous rate over the next decade.The prospects are good for both these green utilities as wind turbine prices have been falling as a result of sharp competition amongst WTG companies in China such as Ming Yang Power.

However like other Green Companies,these 2 have failed in their objectives.While Datang managed to just list at the lower end of its price range and by raising just $640 million which is nearly half of its estimated capital raise,Huaneng has scrapped its IPO  altogether.The other Chinese wind power companies listed in HK like Goldwind and Longyuan too have seen adverse price performance.Note that Goldwind had faced a torrid time in listing its shares going through numerous rounds of planning and cancelling its IPO in HK.

Huaneng Renewable scraps $1.28 billion Hong Kong IPO

Huaneng Renewables Corp, which holds among China’s largest wind assets, pulled its up to $1.28 billion initial public offering as a stalemate at the U.N. climate talks and a weak Hong Kong market hurt investor appetite.

Its peer, China Datang Corp Renewable Corp, priced its Hong Kong offering at HK$2.33, representing the low end of an earlier indicated range raising about $640 million, a source familiar with the deal said.Datang originally aimed to raise up to $1.5 billion from its Hong Kong IPO. A total of 2.14 billion shares were sold, the source added.

PG

Abhishek Shah

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