Huaneng Renewables vaults on parent's cash offer for shares

Business | 3 Sep 2019 11:52 am

Huaneng Renewables Corp., one of China’s biggest wind power producers, jumped the most in more than four years after revealing its parent company plans to make an offer for all outstanding Hong Kong shares, Bloomberg reports.

The Beijing-based company was notified by China Huaneng Group Co on August 29 of the plan to make the cash offer, which could result in its privatization and delisting, it said in a filing to the Hong Kong stock exchange yesterday.

The offer hasn’t been finalized and there is no certainty that the plan will proceed, it added.

It did not disclose a potential offer price.

Shares in Hong Kong, which resumed trading after being suspended Friday, surged by 20 percent to HK$2.61 in pre-market trading yesterday, the biggest intraday gain since July 2015.

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 percent of the renewable company’s total issued shares, according to yesterday’s statement. The state-owned power giant is also looking to buy a controlling stake in solar farm operator GCL New Energy Holdings in a deal announced in June.

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