China's nuclear power IPO begins

CGN Power Co, the Chinese mainland's largest nuclear power producer, opened its retail books on Thursday for a Hong Kong initial public offering (IPO).

CGN Power, a subsidiary of China General Nuclear Power Group, will sell 441 million shares in Hong Kong, 5 percent of its total global offering of 8.8 billion shares.

The IPO price was set at 2.78 HK dollars (35.8 U.S. cents) per share and will raise 3.16 billion U.S. dollars, the biggest IPO in Hong Kong this year.

CGN Power's retail book building is scheduled to close on Dec. 2, with the trading debut is slated for Dec. 10 on the main board of the Hong Kong stock exchange.

CGN Power generates 55 percent of the mainland's nuclear energy. It currently operates 11 power stations, mainly in South China's Guangdong Province.

Nearly 55 percent of the IPO proceeds will be used to acquire an additional 41 percent equity interest in Taishan Nuclear, controlled by CGN Power's parent company China General Nuclear Power Group. Other proceeds will be used to finance construction of new generating units, research and development, and debt servicing.

Also on Thursday, Fitch Ratings left the rating of China General Nuclear Power Group (CGN) intact, despite the CGN IPO.

CGN's issuer default rating, Fitch said, is equalized with the China sovereign (A+/Stable) because of its significance to the state's energy strategy and the substantial tangible state support it consistently receives.

Fitch expects CGN to remain strategically important as the government plans to triple nuclear power capacity by 2020.

According to China's Energy Development Strategy Action Plan (2014-2020) unveiled last Wednesday, nuclear power capacity is expected to reach 58 gigawatts by 2020, from 17.8 gigawatts as of June this year.