China Power prepares to delist clean energy project company from public exchange

Share

State-owned power company China Power has confirmed shareholders in its clean energy project business will vote next month about whether to approve a plan to delist the business from the Hong Kong exchange.

Stockholders in clean energy development unit China Power Clean Energy Development Co Ltd have been asked to vote through a plan for the business to be subsumed into its unlisted parent China Power New Energy Ltd, which is one of the entities overseen by China’s State-Owned Assets Supervision and Administration Commission.

The scheme, first floated in late March, would involve shareholders in the project business being offered either HK$5.45 per share (US$0.70) or six shares in the parent company. As such stock would be held in an unlisted Chinese state-owned company, the board of China Power Clean Energy anticipates all but two main shareholders will exercise the cash option if the move is approved.

Cash premium

The cash offer, although it represents only a 0.9% premium on the last “practicable” day of trading in the shares, which closed at HK$5.40, is 94% higher than the 60-day average price in the stock before that point, hinting the company was hardly watertight when it came to keeping details of the move under wraps before trading in the shares was suspended.

The shareholders expected to take up the stock option are the parent company itself, which currently owns 26.42% of the Clean Energy Development business, and the state-owned China Three Gorges Corporation.

The takeover, which would effectively remove the project development business from the public scrutiny it faces on the Hong Kong exchange, is expected to cost China Power New Energy around HK$2.9 billion (US$371 million).

China Power Clean Energy Development shareholders will vote on the proposal in Hong Kong on July 12.