GD Power Development Co plans to raise about 3.1 billion yuan (US$413 million) in a pubic share offering to fund expansion, the major Chinese electricity producer said yesterday.
It priced the offer at 17.52 yuan apiece, or the average price over the past 20 trading days. It aims to raise no more than 3.1 billion yuan "in principle" in the share placement, the company said in a statement to the Shanghai Stock Exchange.
The utility will use the proceeds to acquire stakes in three power generating projects, including a hydro power project, from its state-owned parent, China Guodian Corp. These stakes are valued at around 3.1 billion yuan.
The share offer was first announced in April when GD Power said it planned to issue no more than 400 million shares. At that time GD Power was quoted around 14 yuan but the stock has risen some 40 percent since then, meaning the final issuance amount could probably be short of 400 million shares based on the 3.1-billion-yuan fund-raising target.
In yesterday's trading, GD Power opened higher at 21.77 yuan but closed at 19.23 yuan, down 2.83 percent. The statement was released before the market opened.
If the funds to be raised exceed 3.1 billion yuan, the addition will be used to replenish working capital and repay bank loans. Everbright Securities said the share offer could pave the way for GD Power to buy more assets form its parent.
Subscriptions for the shares will start tomorrow.