China wind giant Longyuan carries out IPO - reports

China’s largest wind power producer China Longyuan Power Group has raised HK$17.5 bn ($2.26 bn) in an initial public offering (IPO) of shares on the Hong Kong stock market, traders reported.

The IPO is the world’s third largest offering by a renewable energy company. Longyuan sold 2.14 bn shares at HK$8.16 per share, at the top end of the price range offered to investors, according to reports. Longyuan has yet to have made an official announcement on the IPO. Demand from Hong Kong and investors far exceeded expectations, traders said, adding that buying was led by Chinese sovereign wealth fund China Investment Corp, and US billionaire Wilbur Ross’ WL Ross & Co.

The share issue was managed by investment banks Morgan Stanley and UBS. The world’s biggest renewable energy IPO was carried out by Iberdrola Renovables in 2007, which raised $6.6bn. The second largest was carried out by EDP Renovaveis in June 2008, with the company raising $2.4 bn.

China Longyuan Electric Power is a subsidiary of the State-owed China Guodian Corp, responsible for Guodian's renewable energy assets. Longyuan is the largest wind power generator in Asia and the fifth-largest in the world. It had a 24 percent share of China's wind power market in terms of total installed capacity as of the end of 2008.

The company had 3,032 MW of consolidated wind power generating capacity at the end of the third quarter 2009. The company has earmarked half of its IPO proceeds to help fund its $4.86 billion capex plan, which will raise Longyuan's installed capacity to 6,500 megawatts by 2010.