The world’s largest wind power producer Longyuan Power [0916:HK], a partially owned subsidiary of state-owned China Energy Investment Corporate (CEIC), has obtained approval from CSRC for a dual-listing on the A-share market through a stock swap, as reported by Shanghai Security News on December 8. Specifically, Longyuan Power will absorb loss-making listed company Inner Mongolia Pingzhuang Energy Resources [000780:CH] by issuing A-shares to all the shareholders of the latter in a stock exchange ratio of 1:0.3407. The target company will be delisted from the A-share market upon completion of the deal, while Longyuan Power will raise around RMB3.946bn by issuing 345.6m new shares. Additionally, Longyuan Power will purchase part of the wind power assets from its parent company CEIC with RMB5.774bn, raising its installed wind power capacity by 1.99 gigawatts (GW) to 24.41GW.
CEIC integrated its profitable wind power assets and have them listed in both the A-share and H-share market through the transaction, in alignment with China’s initiative of restructuring and reforming state-owned enterprises to increase their competitiveness. CEIC committed that it will inject an additional 21.4GW of wind power assets into Longyuan Power after the recent deal. The dual-listed company’s installed wind power capacity is expected to hit 60GW with 15GW to be added from 2021 to 2025, and it will also benefit from broadened financing channels through the listing, according to an analysis at Citibank.