Huadian Power International

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Huadian Power International Corp., Ltd. (HPI), China's third largest energy developer, was created in October of 2002 when China broke up the former state-owned monopoly, State Power Corp., into five similar-sized power producers - China Huaneng Group, China Datang Group, China Huadian Group, China Guodian Group and China Power Investment Group. The assets of the Hong Kong listed Shandong International Power Development (SIPD), which was a joint venture between the Shandong Electric Power Co. and the Shandong Provincial Electric Power Bureau, were placed under China Huadian Group following the restructuring. In November of 2003, SIPD formally changed its name to Huadian Power International Corp. to reflect its new state-owned parent company, China Huadian Group, which held 53.56% of HPI's shares at the time. State-owned Shandong International Trust and Investment Corp. owned 17.19% of HPI while private and institutional investors held the remaining shares. In June 1999, SIPD offered 1.275 billion shares (about 25% of the company) in an initial public offering on the Hong Kong Stock Exchange. A total of US$260 million was raised which was expected to help finance new projects. Southern Energy Inc (whose name changed to Mirant as of January 2000), through its affiliate, Hong Kong-based Consolidated Electric Power Asia, acquired 9.99% stake through this public offering through acquisition of 509.5 million shares for US$104 million. In May 2002, control of this stake was replaced by BNP Paribas Peregrine. In February of 2004, HPI completed an A-share listing on the Shanghai Stock Exchange. The tender of the 765 million shares (about 15% of the company) was launched in January and raised about US$232.8 million, with 284.5 million of the shares being sold to individuals, a further 284.5 million shares to institutional investors and 196 million shares to its parent, the China Huadian Group. HPI was to use the proceeds to finance three expansion projects totaling 1,200 MW. By the end of 2004, the Shandong-based power company could boast an installed power capacity of 8,580 MW, with 86 percent of that concentrated in Shandong Province. The company had planned to expand that capacity to 16,040 MW by 2008. None None