Huaneng share sale aims to reduce debt
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Huaneng Power International Inc, the listed arm of the country's largest domestic electricity corporation, said yesterday it plans to raise 8.55 billion yuan in a private share placement to fund new energy projects and reduce debt.
The company's stock surged as high as 5.3 percent to 8.28 yuan in yesterday morning's session before ending up at 8.02 yuan on a 2.04 percent gain.
The power generator said in a statement to the Shanghai Stock Exchange yesterday that it plans to sell as many as 1.2 billion A shares for a minimum of 7.13 yuan each.
Huaneng Power also plans to issue 400 million new H shares to China Huaneng Hong Kong, a wholly owned subsidiary of State-owned Huaneng Group, to expand its business overseas.
The company said the new share issue is expected to increase its market share, improve production efficiency and promote sustainable development.
The move comes after Huaneng Power's announcement on Jan 5 to spend 8.63 billion yuan to purchase nine assets owned by Shandong Power to consolidate its market presence in Shandong and Yunnan provinces.
Guosen Securities, however, said given the small scale of the total installed capacity of the new investment - 3.95 million kW - the company's new issuance will not have a dramatic impact on the company's earnings in 2010 and 2011.
