Yangtze Electric Power Co.

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Yangtze Electric Power Co. (YEPC) was set up in November of 2002 as the listing vehicle to raise capital for the state-owned China Yangtze River Three Gorges Development Corporation, which ran the world's largest hydropower project. YEPC raised nearly US$1.2 billion on its initial public offering (IPO) in Shanghai in November of 2003 by offering a total of 2.33 billion shares at 4.30 yuan each. The listing was China’s largest in that year and was oversubscribed by an estimated 70 times. 55 percent of the total 2.33 billion shares were slated for public investors, while the remaining 45 percent were placed with institutional investors, who had a lock-up period (meaning they must hold the shares) from six months to 18 months. YEPC offered 29.6% of its shares and China Yangtze River Three Gorges Development Corporation retained a 63% controlling stake. The proceeds from the issue were to be used to purchase the first tranche of 700MW generators operating at the Three Gorges hydroelectric project in Hubei province. YEPC was to buy the generators from China Yangtze River Three Gorges Development, which owned an 89.5% interest in YEPC prior to the issue. The company's other investors included Huaneng Power International (3%), China Nuclear Power Industry Group (3%), the China National Petroleum Corporation (3%), the Gezhouba Group (1%) and the Yangtze River Water Resources Commission (0.5%). The Three Gorges project began construction in 1993 and generated its first electricity early in 2003 but was not expected to be fully completed until 2008. The US$25 billion Three Gorges Dam was to be the largest power project ever undertaken in Asia, although its 18,200MW generating capacity was to represent less than a single year's worth of growth in Chinese electricity demand. The Dam was 2,309 meters long and 185 meters high, and its vast reservoir held 39.3 billion cubic meters of water. China had said that the purpose of the dam was to control flooding on the Yangtze river and produce electricity for China's rapidly expanding industrial base.