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Private equity firms eye Chinese wind developer

Chinese and foreign private equity firms have submitted first-round bids for a minority stake in Honiton Energy.

Wind energy provider Honiton Energy has received first-round investment bids from Chinese and foreign private equity and hedge funds, which value it at about $250 million, according to an industry source. No details on the identities of the firms in question are known.

The Beijing-based company plans to sell a minority stake to an investor and the transaction could be closed before the end of the year, the source said, adding Morgan Stanley has been hired to advise the process. The company is also planning an overseas listing in a year or two, the source added.

Morgan Stanley declined to comment. Honiton Energy did not respond to requests for comment at press time.

In July 2008, a joint venture between Bahrain-based investment firm Arcapita and Indian conglomerate Tanti Group acquired Honiton Energy for $2 billion from its founders Paul Eveleigh and Jin Fang Li. Eveleigh and Li maintain minority stakes in the company and are to continue to manage the business for at least five years from the time of the acquisition. Presently, Honiton Energy owns the rights to develop wind power projects with a total estimated installed capacity of 6,336 megawatts on five sites in the China’s Inner Mongolia region.

China’s renewable energy sector has seen increasing interest. Last month, Chinese sovereign wealth fund China Investment Corporation agreed to invest HK$5.5 billion ($710 million; €471 million) for an approximately 20 percent stake in GCL-Poly, a Hong Kong listed renewable energy company with operations in China.

In October, Hong Kong-based private equity firm Affinity Equity Partners acquired Beijing Leader & Harvest Electric Technologies, a Chinese energy-saving device company, in a $200 million equity buyout.