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Shanghai Electric seeks $1.47b for diversification

  • Anita Davis
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Shanghai Electric is reportedly looking to raise RMB9.5 billion ($1.47 billion) through a private share placement that will help the company diversify is business into other areas of the energy sector. As part of the raise, China Power Investment Group will buy at least RMB$2.5 billion worth of shares that will further enable Shanghai Electric to purchase assets from China Power Investment.

According to Reuters, the funds will be used to acquire nuclear power assets from China Power Investment, which is touted as one of the country's top power entities. The company specifically looks to issue up to 1.83 billion shares to as many as 10 investors at a price of RMB5.21 per share.

CapitalVue.com elaborates that RMB9 billion of Shanghai Electric's raise will be used to fully acquire Hexi Energy Investment, and the remaining RMB500 million will be earmarked as working capital.

According to Franklin Templeton Advisors, which is also an investor in Shanghai Electric, the company had a market value of $474 million as of June 30.

Shanghai Electric's raise comes as China looks to build approximately 30 nuclear reactors to shift the country's reliance from thermal energy, Reuters added, noting that the 30 reactors accounts for approximately 40% of the total number of reactors under construction worldwide.

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