China’s Biggest Windfarm Operator Seeks Backdoor Listing in Shenzhen
What’s New: Hong Kong-listed China Longyuan Power Group Corp., the country’s biggest publicly traded windfarm operator, is seeking to go public on the Shenzhen Stock Exchange through a backdoor listing, according to a statement filed to the bourse on Sunday.
The plan will see Longyuan make the listing using loss-making Inner Mongolia Pingzhuang Energy Resources Co. Ltd. as a shell.
Meanwhile, Pingzhuang Energy will sell its existing coal-mining unit to a subsidiary of its leading shareholder, China Energy Investment, which is also a major shareholder of Longyuan. In addition, China Energy Investment will also sell some of its other new energy assets to Longyuan.
What’s the background: Longyuan can obtain a higher valuation on the A-share market than it can get in Hong Kong, the company said. And the move will also allow Longyuan to broaden its financing channels.
Moving China Energy Investment’s clean energy units into Longyuan can help reduce competition among the state-owned giant’s subsidiaries, the statement said.
The country’s power generators have been pushing mergers among their subsidiaries so as to shut down unprofitable ones and cut losses. Some have had to delist floated units and move assets into them, before letting them go public again on the A share market for future financing.
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