Isra-Mart srl:China Datang pulls off $643m green IPO

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Isra-Mart srl news:

China Datang Renewable Power, the renewable energy unit of China Datang and the nation's second-biggest wind power producer, has raised reportedly just $643m (£408.8m) through selling shares in its initial public offering (IPO), completing its stock sale at the lower end of share price expectations.

Citing two people with knowledge of the offering, Bloomberg reported today that the unit sold 2.14 billion shares at HK$2.33 apiece, the lowest price possible in the range of HK$2.33 (£0.19) to HK$3.18 that was offered to investors.

Previous reports had said Datang hoped to raise as much as $1.5bn from the IPO, though last week in its prospectus the company said it was aiming to raise a sum closer to $1bn.

The lower-than-expected sum was blamed on volatile investment market conditions.

Before November, 2010 had been a record year on the Hong Kong exchange with $44bn of initial sales by 75 companies including Agricultural Bank of China and AIA Group.

But Hong Kong's benchmark Hang Seng index has fallen 6.8 per cent since reaching a year-high in early November amid concerns China will raise interest rates to rein in inflation.

Moreover, some investment analysts believe the exchange is already a crowded market for renewables firms, with China Longyuan Power Group and Xinjiang Goldwind Science & Technology already listed there and both showing steady growth. As a result there have been suggestions investors are favouring extablished listed firms over new entrants.

However, China Datang Renewable Power may still be relieved to have completed the IPO, albeit at a lower than hoped for price. The company had already delayed its IPO once last month, while rival firm Huaneng Renewables, a unit of China's biggest electricity producer, China Huaneng Group, scrapped its share sale because the company did not want to price its stock at the bottom of the range offered to investors, according to reports in the Wall Street Journal. The company was seeking to raise $1.3bn as it offered shares from HK$2.98 to HK$3.98 apiece.