NewQuest, Tsing exit China Hydroelectric to Shenzhen Energy

According to a filing, Shenzhen Energy will purchase a 100% interest in CPT Wyndham Holdings - which owns China Hydroelectric - via its Hong Kong subsidiary. It will pay $492.6 million in equity plus a $50 million debt restructuring fee.

NewQuest will sell a 93.7% stake in China Hydroelectric - of which 53% is held by its first fund and 40.7% by its second fund. Tsing will offload a 0.09% interest via China Environment Fund III. Other sellers include Junya Investment, Asia Pacific Energy Investment and individual investors.

Secondaries specialist NewQuest is targeting $500 million for its third pan-Asian fund. The firm closed its previous vehicle at $316 million in July of last year. that close came as the GP took private US-listed China Hydroelectric in a deal worth approximately $190 million. The transaction was first announced in September 2013.

In September 2012, NewQuest led an investor group that successfully replaced five of China Hydroelectric's seven directors, citing strategic and operational issues at the company and the apparent lack of credibility and accountability on the board. They were replaced by four directors nominated by the investor group.

China Hydroelectric was set up in 2006 to acquire and operates small hydroelectric power projects of less than 50 megawatts in capacity. It raised approximately $350 million through four rounds of private financing and then $100 million when it went public in January 2010.

At present the company has 25 hydropower stations - of which 22 are wholly-owned and three are majority-controlled - in Fujian, Yunnan and Zhejiang with total installed capacity of 506 MW. The company sells its electricity to local power grids, which are mandated by the government to buy from small hydro plants for fixed tariffs.

By the end of June, China Hydroelectric had $753 million in assets, while its debt load had narrowed to $35.9 million from $270.2 million in 2012.

In the first half of 2015, the company posted revenue of $45 million, generating net profit of $12 million. This compars to revenue and profit of $89 million and $6 million for 2014 as a whole.

Shenzhen Energy operates gas turbine, wind, photovoltaic, hydropower and waste incineration power plants. The company generated RMB12.5 billion in revenue last year, up from RMB12.3 billion in 2013. Its net profit was up 40% year-on-year at RMB2.03 billion in 2014.

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• Topics
• Greater China
• Exits
• Cleantech
• China
• Cleantech
• Trade sale
• Secondaries
• Exit
• NewQuest Capital Partners
• Tsing Capital