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Power generator maker goes for total listing

By Gong Zhengzheng (China Daily)
Updated: 2007-05-18 08:50

Dongfang Electric Corp, China's top power generator maker, yesterday said it would list in the stock market in its entirety by injecting its core assets worth up to 15.01 billion yuan into a dually listed (Hong Kong and Shanghai) unit.

The listed arm, Dongfang Electrical Machinery Co Ltd, will buy a 68.05 percent stake in Shanghai-listed Dongfang Boiler (Group) Co Ltd and a 100 percent stake in Dongfang Turbine Co Ltd from their parent firm, owned by the central government, for 12.18 billion yuan.

Dongfang Electrical Machinery will also spend up to 2.83 billion yuan to purchase the remaining shares in Dongfang Boiler from other shareholders.

The company, listed in both Hong Kong and Shanghai, said 8.9 billion yuan would come from issuing 367 million A shares at 24.17 yuan each to the parent firm, with the rest of the 15.01 billion yuan to be paid in cash by instalments.

Dongfang Electrical Machinery will be renamed Dongfang Electric Co Ltd after the deal.

"The deal will improve our competitiveness considerably as we will have a wider product range and strong profit-making ability," said Si Zefu, chairman of Dongfang Electrical Machinery.

Si said the firm's line-up will include coal-fired, gas-fired, hydroelectric, nuclear and wind power generators.

Its 2006 net profits would surge to 2.14 billion yuan from 992 million yuan following the deal, he said.