China National Nuclear Power Co. won the environment ministry’s permission to sell shares to fund 174 billion yuan ($27 billion) of projects in the nation’s first initial public offering by a developer of atomic energy.
The Ministry of Environmental Protection approved a company report seeking clearance, according to a statement on the ministry website yesterday that didn’t mention the amount to be raised. The share sale by the unit of China’s biggest developer of nuclear energy had been approved by the China Securities Regulatory Commission in January.
The company may need to raise about 50 billion yuan from the share sale, Macquarie Group Ltd. said, as initial public offerings falter in China. The nation, planning to build more nuclear reactors than any other country, approved a safety framework June 1 that may help end a ban on approving new atomic plants imposed after last year’s Fukushima disaster in Japan.
“Unless China National Nuclear prices its offering extremely high, investors will like it even though the overall market sentiment may not be ideal,” said Patrick Dai, an analyst at Macquarie in Hong Kong. “China National Nuclear will give the market something it has never seen.”
The funds will be used to build and operate five nuclear power projects in the Jiangsu, Zhejiang, Fujian and Hainan provinces that will cost 174 billion yuan, the company said in the report to the environmental protection ministry. The balance of the funding could come from loans, Dai said.
Compared with equipment makers, operators of nuclear power will enjoy “decades of steady profits” even after the nuclear power construction boom cools off, Dai said. Shanghai Electric Group Co. (2727), Dongfang Electric Corp. (1072) and Harbin Electric Co. (1133), Chinese manufacturers of nuclear-power equipment, have sold shares in Shanghai and Hong Kong.
Pan Jianming, Beijing-based spokesman at China National Nuclear Corp., the parent, didn’t answer two calls to his office telephone today.
Initial public offerings in China have raised $9.2 billion this year, down from $22.3 billion in the same period last year, according to data compiled by Bloomberg.
Parent China National Nuclear Corp. also owns Shenzhen- listed SUFA Technology Industry Co., a nuclear-valve maker, and Hong Kong-listed CNNC International Ltd. (2302), a uranium producer in Niger.
China suspended new nuclear projects after last year’s earthquake and tsunami in Japan crippled the Fukushima Dai-Ichi plant and prompted a global review of atomic plants. China’s Cabinet approved “in principle” a proposed plan on nuclear safety for the five years ending 2015 and long-term targets for 2020, the government said on its website on May 31.
The report didn’t specify when approvals for new plants would resume or mention capacity goals.
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