China’s Silk Road Fund will be the largest cornerstone investor in the $2 billion listing of power plant developer China Energy Engineering Corporation (CEEC).
As the largest of 20 cornerstone investors, China’s Silk Road Fund will invest $300 million through Hong Kong-based investment arm CEZN Limited. The initial public offering will see 8.8 billion shares at HK$1.59 (€0.194; $0.205) to HK$1.73 per share listed on the Hong Kong Stock Exchange (HKEx).
The National Council for Social Security Fund, China’s $249.6 billion sovereign wealth fund, will subscribe to about 10 percent of the offering. State Grid Corporation of China, the country’s largest state-owned grid company, will invest $200 million, while China Southern Power Grid will invest $60 million.
Other energy investors include China General Nuclear Power Corporation (CGN Power), Huaneng Renewables, China Datang Corporation, Beijing Energy Investment and China XD Group Corporation. Each have agreed to buy $50 million of shares.
CITIC Bank and Everbright Securities will each make $50 million commitments, while Ping An Life Insurance will invest $30 million. General Electric, the only foreign investor, will invest $15 million through its Singapore-based subsidiary.
Part of the proceeds from the listing will be used for power and infrastructure construction and contracting projects in China and abroad including EPC and PPP projects, as well as repayment of bank loans. The deal will price on 2 December and CEEC will start trading at HKEx on 10 December. China International Capital Corporation and CITIC CLSA Capital Markets are the joint sponsors.
The $40 billion Silk Road Fund was founded in 2014 by Beijing to finance its ‘One Belt, One Road’ infrastructure initiative. Its investment spectrum covers infrastructure, resources and energy, industry cooperation and financial cooperation.
Founded in 1950s, state-owned CEEC focuses on the design and construction of power plants with a total installed capacity of more than 160 gigawatts from 2012 to 2014, according to the Sullivan Report. It has also actively taken part in energy and transportation projects across Southeast Asia, Central Asia, Europe, Africa and Latin America.