Huaneng Power International (HPI) has confirmed that it has received approval for an A-share listing after its merger with Shandong Huaneng Power (SHP) is completed. HPI told analysts at a briefing on Monday that the government in Beijing and the China Securities Regulatory Commission had assented to the share sale once the merger formalities are completed by the end of the year. That means the company would be looking to list on the Shanghai Stock Exchange in the first quarter of 2001.
The size of the sale is likely to be around 350 million shares with a price predicted to be around the Rmb5 ($0.61) level. That would translate into a Rmb1.75 billion deal - one of the largest seen in China in recent years.
The company applied for an A-share listing early in 1999. But a central government moratorium on new share issues prevented it from receiving approval until now.
With the acquisition of SHP complete, and a third listing under its belt - HPI is already listed in Hong Kong and New York - the company's net gearing should fall from 46% at present to 41%. According to analysts present at the briefing, this will make it easier for HPI to further expand its portfolio of power assets both in China and abroad.
In a note written to investors after the briefing, David Fung, power analyst at Salomon Smith Barney in Hong Kong said: "The meeting reaffirmed our view that HPI should be the core holding of any diversified greater China funds. It is the only power company with a nationwide portfolio that is best used as a proxy for the full recovery of the PRC economy."