Companies

China's Goldwind pulls $1.2b HK IPO

(Agencies)
Updated: 2010-06-14 14:40

HONG KONG - China's wind turbine maker Xinjiang Goldwind Science & Technology said it shelved a plan to raise up to $1.2 billion in a share sale in Hong Kong because of deteriorating market conditions.

"In light of the deterioration in market conditions and recent unexpected and excessive market volatility, the company ...has formed the view that it would be inadvisable to proceed with the global offering at this time," the company said in a statement.

The wind-turbine maker, based in Urumqi, was attempting a share sale at a time when Hong Kong's Hang Seng Index has slid more than 10 percent since April 9 as the Europe debt crisis reduced investors' willingness to take risk. Agricultural Bank of China (ABC)may sell as much as $15 billion of shares in Hong Kong, according to an e-mail sent to investors.

"A number of smaller issues have been canceled," said Khiem Do, the Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management (Asia) Ltd. "The Chinese market has been out of favor for the last few months, given the normalization of interest rates, tightening on the property side. Some investors have concerns about inflation, wage rises."

Goldwind had planned to sell 395.3 million new shares, equal to a 15 percent stake, at between HK$19.80 and HK$23 apiece, it said on June 6. About 40 percent of the proceeds would be spent on building plants and 24 percent on overseas expansion, the company said.

The Wall Street Journal reported on the shelving of the share sale yesterday. China International Capital Corp, Citigroup Inc and Credit Suisse Group AG were managing the offering. Goldwind is already listed in Shenzhen. Markets in China are closed June 14 to June 16 for a holiday.

Delayed share sales

Related readings:  CTF said to buy $40m of Goldwind HK shares  Goldwind may raise $1.2b in HK IPO   Goldwind in $1.2b HK IPO: sources  Goldwind gets $6b credit line to fuel its int'l drive

Swire Properties Ltd delayed a plan to sell shares in Hong Kong on May 6, its parent said at the time. Strikeforce Mining & Resources Plc, the Russian molybdenum producer controlled by billionaire Oleg Deripaska, delayed taking orders for its Hong Kong IPO until equity markets have stabilized, a person with knowledge of the decision said on May 8.

China Tian Yuan Mining Ltd, the largest privately owned iron ore producer in the northern province of Hebei, delayed a Hong Kong initial public offering last month, two people with knowledge of the decision said on May 7.

"The fact that ABC is continuing to push through with their IPO is a positive sign, although the valuation obviously cannot be as optimistic as it was before," Baring Asset's Do said.