China Huaneng plans cash offer for wind power unit's HK shares

[SINGAPORE] Huaneng Renewables Corp, one of China's biggest wind power producers, said it was notified by its parent company that it intends to make an offer for all outstanding Hong Kong-listed shares.

The Beijing-based company was notified by China Huaneng Group Co. on Aug. 29 of the plan to make the cash offer, which could result in its privatization and delisting, it said in a filing to Hong Kong stock exchange Monday. The offer hasn't been finalized and there's no certainty that the plan will proceed, it added. It didn't disclose a potential offer price.

Its shares in Hong Kong gained for six sessions to HK$2.17 (S$0.39) on Thursday, the highest in seven weeks, before it requested a trading suspension Friday. It plans to resume trading at 9 a.m. Monday.

China, the world's biggest builder of renewable power, has been seeking to streamline its wind and solar industries, moving away from subsidies that spurred a glut of capacity. Huaneng Renewables is expected to rush to boost capacity over the next two years to get ahead of Beijing's plan to halt financial support for new onshore wind farms from 2021.

The company last week reported a first-half net income of 3.09 billion yuan, beating a 2.83 billion yuan median of three analyst estimates compiled by Bloomberg. Sales growth should continue into the second half of the year as it plans to expand wind power capacity by more than 1.2 gigawatts, according Bloomberg Intelligence.

Huaneng Group controls 52.7 per cent of the renewable company's total issued shares, according to Monday's statement. The state-owned power giant is also looking to buy a controlling stake in solar farm operator GCL New Energy Holdings Ltd. in a deal announced in June.

BLOOMBERG