China nuclear firm plans biggest domestic IPO in 5 years

China National Nuclear Power Corp., one of the top two state nuclear-power giants, will raise as much as $2.16 billion in what is set to be the country’s largest domestic initial public offering in five years.

CNNPC plans to sell up to 3.89 billion new shares, or a quarter of its total, in the sale, according to its IPO prospectus, filed to the Shanghai Stock Exchange on Monday. The offering’s expected launch date is June 2.

The share float is poised to be the largest in the domestic market since China Everbright Bank raised $US2.6 billion in Shanghai in August 2010, according to data provided by Dealogic.

China National Nuclear Group holds a 97% stake in CNNPC. About 40% of China’s total nuclear energy is generated by operators controlled by CNNPC. Excluding issuance-related fees, the firm will raise 13.4 billion yuan ($2.16 billion), according to the prospectus. CNNPC will allocate 4.18 billion yuan of the raised capital to replenish its holdings of cash, and will invest the rest in the construction of projects in Fujian, Zhejiang, Hainan and Jiangsu provinces. Citic Securities UBS and China Securities are the underwriters for the deal.

The China Securities Regulatory Commission approved the IPO along with those of 22 other companies on Friday.

China Nuclear Engineering Corp., meanwhile, plans to raise 2.7 billion yuan by issuing up to 525 million shares, according to a preliminary prospectus released Friday on the securities regulator’s website.

Those planned offerings follow a successful listing in Hong Kong by China’s other dominant nuclear-power operator, China General Nuclear Power Group, which raised $3.16 billion in an IPO in December.

China’s nuclear-power firms are turning to the red-hot domestic market to raise capital for rapid expansion, after Beijing pledged to rely more on renewable energy for power generation.

China suspended the approval of nuclear-power plants after Japan’s Fukushima nuclear disaster in 2011 due to safety concerns, but the industry has since received fresh impetus after Beijing stepped up efforts to reduce its reliance on coal.

China has 22 operating reactors on the mainland with a total installed capacity of 20.3 gigawatts as of 2014, while 24 reactors are under construction, including the world’s first Westinghouse AP1000 units, according to the China Nuclear Energy Association. The country aims to more than double its capacity to at least 58 gigawatts by 2020 and around 150 gigawatts by 2030.