China Power International Development Limited - Acquisition of the entire interest in certain clean energy project companies and rights issue
Slaughter and May Hong Kong advised China Power International Development Limited (China Power) in relation to its acquisitions of the entire interest in certain clean energy project companies (the Target Companies) respectively from CPI Holding, a controlling shareholder of China Power and a wholly-owned subsidiary of State Power Investment Corporation (SPIC), and from SPIC, an indirect controlling shareholder of China Power, for a total consideration of approximately RMB5.0 billion (HK$5.8 billion). The acquisitions were announced on 9 October 2017 and constitute major transactions and connected transactions under the Hong Kong Listing Rules. In order to finance the acquisitions, China Power raised approximately HK$4.5 billion by way of a rights issue to its existing shareholders. The rights issue was announced on 8 November 2017 and Merrill Lynch Far East Limited acted as sole global coordinator, sole bookrunner and sole underwriter. The rights issue was over-subscribed and dealings in the rights shares in their fully-paid form commenced on The Stock Exchange of Hong Kong Limited on 18 December 2017.
China Power’s principal activities are the development, construction, operation and management of power plants. Its shares are listed on the Main Board of the Hong Kong Stock Exchange.
The Target Companies are principally engaged in clean energy power generation, mainly including hydropower, natural gas power, wind power and photovoltaic power in Anhui, Guangdong, Guangxi, Hunan and Shandong.
The acquisition will accelerate China Power’s transition to a clean energy company. After the completion of the acquisitions, China Power’s operational capacity with expansion potential will be enlarged and the profitability will be improved. It will also strengthen China Power’s presence in developed regions with healthy power supply-demand balance, mature economic conditions, and limited renewable curtailment issues.