China to launch first “nuclear” IPO

China National Nuclear Power Company will IPO to fund projects worth US$27 billion.

China’s first initial public offering by a developer of atomic energy has won the approval of the Ministry of Environmental Protection. The IPO approved by the China Securities Regulatory Commission last January.

The company, a subsidiary of China National Nuclear Corporation (CNCC), may need to raise US$7.9 billion from the share sale, which could prove difficult as IPOs have lost much of their appeal in China. The balance of the funding could come from loans.

The funds will be used to build and operate five nuclear power projects in the Jiangsu, Zhejiang, Fujian and Hainan provinces that will cost some US$27 billion.

“Unless China National Nuclear prices its offering extremely high, investors will like it even though the overall market sentiment may not be ideal,” said Patrick Dai, an analyst at Macquarie in Hong Kong. “China National Nuclear will give the market something it has never seen.”

Founded in 1988, CNCC oversees all aspects of China's civilian and military nuclear programs. China plans to build more nuclear reactors than any other country.

China’s Cabinet has approved in principle a proposed plan on nuclear safety for the five years ending 2015 and long-term targets for 2020.