China’s nuclear power giant CGN to sell up to 5 billion new shares to fund reactor construction
Based on Monday’s share price, the sale could raise over US$1 billion
Shares of CGN Power, China's largest nuclear power producer, surged as much as five per cent after it unveiled a plan to sell new shares, equivalent to a 10 per cent stake, to fund construction of four reactors.
The Shenzhen-based company said it would seek approval from shareholders and the market regulator, the China Securities Regulatory Commission, to issue up to 5.05 billion new A shares to be listed in Shenzhen to finance the projects with capacity amounting to just over a fifth of the firm’s current total.
“Proceeds raised from the A share offering … will be mainly used for the construction of nuclear power plants,” it said in a filing to Hong Kong’s stock exchange on Sunday. “On completion of construction and commencement of production, the installed operating capacity of the nuclear power units of the company will be increased by [4.53 gigawatts].”
CGN Power shares ended the Hong Kong morning session 3 per cent higher at HK$2.06. At this price, the firm could potentially raise HK$10.4 billion (US$1.33 billion).
The actual price of the shares to be sold will be determined after consulting fund managers on their level of interest at various price points, and the number of shares to be sold will be subject to market conditions.
The company managed 20 operating reactors at the end of June last year with total installed capacity of 21.47 gigawatts (GW), while another eight units with 10.27GW of capacity were under construction.
It accounted for 61.8 per cent of the nation’s total nuclear capacity in operation and 44 per cent of that under construction.
