China Yangtze, world's largest hydroelectric firm, to list in London
By Alexander Bueso
Date: Wednesday 23 Sep 2020
(Sharecast News) - The world's largest hydropower company has kicked-off a bookbuilding exercise for the sale of Global Depositary Receipts representing 5% of its capital prior to the offering.
Yangtze Power is also the largest listed power company in the People's Republic of China and the owner of four hydroelectric megaprojects along China's Yangtze river, including the Three Gorges Project.
"As we strive to develop our main business of hydropower generation, we also aim to expand our electricity distribution and sales business and our overseas business," said Lei Mingshan, the company's chairman.
The company was looking to sell as many as 110m GDRs, including the up to 10% over-allotment option granted to UBS's London branch, for gross proceeds of between approximately $2.91-3.41bn.
The pricing range for each GDR, representing 10 A shares in Yangtze Power, was $26.46-30.95, the company said in a statement.
The final offer price and number of GDRs was expected to be announced on or around 24 September with trading set to start on a 'when-issued' on or about the following day.
As of 31 December 2019, the group's total installed hydropower capacity of 45,495 MW represented 13.2% of the PRC's total capacity for hydro-electric generation.
No less than 80% of the net proceeds from the sale would be used to repay the offshore loans with which the company financed the recent acquisition of its 83.64% stake in Peru's Luz del Sur electricity distribution company, while no more than 20% would be funnelled towards the overall group's working capital requirements.
Significantly, the very nature of the business, which derived over half of its total annual sales from 'green' products and services, meant that the firm would qualify for the LSE's Green Economy Mark at admission.
From 2021-25, Yangtze said that its annual cash dividend would represent no less than its annual net profits for that year.
Yangtze said that it would also apply to the Shanghai Stock Exchange for admission of the underlying A shares which was expected to coincide with admission of the GDRs to trading on the LSE.
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