Chinese power generation company SDIC says it may list GDRs in London

Environment

(Reuters) – Chinese power generation group SDIC (600886.SS) is considering proceeding with an offering of global depositary receipts (GDRs) in London under a link with the Shanghai exchange, it said on Tuesday.

FILE PHOTO: A power station of the State Development & Investment Corporation (SDIC) is reflected in a lake in Tangshan, Hebei province, China, August 22, 2018. REUTERS/Thomas Peter

The offering would include newly issued GDRs representing underlying “A” shares in the firm, and the proceeds would be used to help expand SDIC’s renewable energy business overseas and paying down offshore debt, the company said here

Reuters reported in July that the state-backed energy firm had hired banks to list in London via the Shanghai-London Stock Connect scheme, in a boost for Britain’s status as a financial center ahead of Brexit.

SDIC Power, which has a market value of $7.9 billion, is looking to raise between $500 million and $1 billion from the sale, a source had said at that time.

The company, which invests in, constructs and operates electric power plants, has a presence in Britain through its ownership of Red Rock Power, a Scotland-based wind farm operator.

It is also involved in other alternative energy generation, including hydropower, thermal, wind and photovoltaic. On July 3, SDIC said its board had approved a resolution to sell its GDRs in London.

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“Through this offering, we will gain better access to the international capital markets,” Chairman Zhu Jiwei said in Tuesday’s statement.

Chinese brokerage Huatai Securities (601688.SS) was the first company to list in London under the Stock Connect link with the Shanghai exchange. There had been concerns that not many companies would follow Huatai to London.

Under the scheme, Chinese companies can list depositary receipts pegged to their Shanghai-listed shares, while British companies can issue shares on the Shanghai Stock Exchange.

Goldman Sachs International, UBS AG London Branch and HSBC Bank plc are acting as joint global co-ordinators and joint bookrunners for the offering.

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Rachel Armstrong and Jan Harvey

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