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Goldwind shelves $1.2 billion Hong Kong share sale

Xinjiang Goldwind Science & Technology Co. shelved a plan to raise as much as HK$9.09 billion ($1.2 billion) in a share sale in Hong Kong, citing poor market conditions. The Chinese wind-turbine maker won't proceed "in light of the deterioration in market conditions and recent unexpected and excessive market volatility," Goldwind said

Xinjiang Goldwind Science & Technology Co. shelved a plan to raise as much as HK$9.09 billion ($1.2 billion) in a share sale in Hong Kong, citing poor market conditions.

The Chinese wind-turbine maker won't proceed "in light of the deterioration in market conditions and recent unexpected and excessive market volatility," Goldwind said in a statement to the Hong Kong stock exchange today. A sale would be "inadvisable" at this time, the company said.

Goldwind, listed in Shenzhen, dropped its fund-raising plans after Hong Kong's Hang Seng Index slid more than 10 percent since April 9 and as Europe's debt crisis curbs investors' willingness to take risk, prompting at least three other companies to shelve offerings in the city.

"The Chinese market has been out of favor for the last few months," saild Khiem Do, the Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management (Asia) Ltd. "Some investors have concerns about inflation, wage rises."

Renewable-energy stocks have fallen worldwide after the failure of United Nations climate talks in December to produce a treaty to fight global warming and promote clean-power sources.

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Xinjiang Goldwind Science & Technology Co. shelved a plan to raise as much as HK$9.09 billion ($1.2 billion) in a share sale in Hong Kong, citing poor market conditions.

The Chinese wind-turbine maker won't proceed "in light of the deterioration in market conditions and recent unexpected and excessive market volatility," Goldwind said in a statement to the Hong Kong stock exchange today. A sale would be "inadvisable" at this time, the company said.

Goldwind, listed in Shenzhen, dropped its fund-raising plans after Hong Kong's Hang Seng Index slid more than 10 percent since April 9 and as Europe's debt crisis curbs investors' willingness to take risk, prompting at least three other companies to shelve offerings in the city.

"The Chinese market has been out of favor for the last few months," saild Khiem Do, the Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management (Asia) Ltd. "Some investors have concerns about inflation, wage rises."

Renewable-energy stocks have fallen worldwide after the failure of United Nations climate talks in December to produce a treaty to fight global warming and promote clean-power sources.

The WilderHill New Energy Global Innovation Index, an 88- member benchmark with a $2.1 trillion market capitalization, has declined 24 percent in 2010. That's almost four times more than the 6.7 percent drop by the MSCI World Index in the period.

Foreign Expansion Blocked

The delay may hamper Goldwind's plans to grow abroad. The company, which last year got 99 percent of its revenue in China, had planned to channel almost a quarter of the proceeds from the share sale on expansion in the U.S., Australia and Europe.

The economic slump in the U.S. and Europe has slowed investment in wind energy, with the average price paid for wind farms worldwide declining to 1.66 million euros ($2.03 million) per megawatt from a peak of 1.75 million euros in mid-2008, according to a report last week by Bloomberg New Energy Finance.

Goldwind, based in Urumqi city in Xinjiang province, had planned to sell 395.3 million new shares, equal to a 15 percent stake, at between HK$19.80 and HK$23 apiece, it said June 6. About 40 percent of the proceeds would be spent on building plants and 24 percent on overseas expansion, the company said.

Some investors decided to skip the Goldwind sale for the coming initial public offering by Agricultural Bank of China Ltd. in Shanghai and Hong Kong, according to a person with knowledge of the matter. Goldwind spokesman Thomas Yao declined to comment.

Agricultural Bank Sale

Agricultural Bank, China's biggest by number of customers, may sell as much as $15 billion of shares in Hong Kong, according to an e-mail sent to investors.

Swire Properties Ltd. delayed a plan to sell shares in Hong Kong on May 6, its parent said at the time. Strikeforce Mining & Resources Plc, the Russian molybdenum producer controlled by billionaire Oleg Deripaska, delayed taking orders for its Hong Kong IPO until equity markets have stabilized, a person with knowledge of the decision said on May 8.

China Tian Yuan Mining Ltd., the largest privately owned iron ore producer in the northern province of Hebei, delayed a Hong Kong IPO last month, two people with knowledge of the decision said on May 7.

"The fact that AgriBank is continuing to push through with their IPO is a positive sign, although the valuation obviously cannot be as optimistic as it was before," Baring Asset's Do said.

Markets in China are closed June 14 to June 16 for a holiday.


Source: http://www.businessweek.com...

JUN 14 2010
http://www.windaction.org/posts/26738-goldwind-shelves-1-2-billion-hong-kong-share-sale
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