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VPower Group Announces Proposed Listing on the Main Board of Hong Kong Stock Exchange
- Offer Price Sets Between HK$2.78 and HK$3.47 per Share
- To Raise Gross Proceeds up to HK$1,943.2 Million
HONG KONG, Nov 13, 2016 - (ACN Newswire) - One of the world's leading large gen-set system integration providers, VPower Group International Holdings Limited ("VPower" or "Company", together with its subsidiaries, the "Group", Stock Code:1608), today announces the proposed listing of its Shares on the Main Board of The Stock Exchange of Hong Kong Limited ("Hong Kong Stock Exchange").
VPower plans to offer an aggregate of 560,000,000 Shares (subject to adjustment and the Over-allotment Option) under the Global Offering, of which 90% are International Offer Shares (subject to adjustment and the Over-allotment Option) and 10% are Hong Kong Public Offer Shares (subject to adjustment) at an Offer Price ranging between HK$2.78 per Share and HK$3.47 per Share. The Hong Kong Public Offering will open at 9:00 am on 14 November 2016 (Monday) and close at 12:00 noon on 17 November 2016 (Thursday). Dealings in Shares on the Hong Kong Stock Exchange are expected to commence on 24 November 2016 (Thursday) with the stock code 1608. The Shares will be traded in board lot of 1,000 Shares. There is an Over-allotment Option to increase the offering size by 15% of the initial size of the Global Offering an aggregate, being 84,000,000 additional Shares.
BOCI Asia Limited and Citigroup Global Markets Asia Limited are the Joint Sponsors and the Joint Global Coordinators of the Global Offering. BOCI Asia Limited, Citigroup Global Markets Asia Limited (in relation to the Hong Kong Public Offering), Citigroup Global Markets Limited (in relation to the International Offering), CMB International Capital Limited, Haitong International Securities Company Limited and The Hong Kong and Shanghai Banking Corporation Limited are the Joint Bookrunners and Joint Lead Managers.
VPower has entered into a cornerstone investment agreement with CITIC Pacific Limited (the "Cornerstone Investor"), pursuant to which the Cornerstone Investor has agreed to subscribe for 204.8 million Shares, representing 8.00% of the Shares in issue immediately following the completion of the Global Offering and approximately 40.63% of the International Offer Shares initially offered under the International Offering, at the Offer Price between HK$2.78 and HK$3.47.
VPower is one of the world's leading large gen-set system integration provider, and the biggest private gas-fired engine-based distributed power generation station owner and operator in Southeast Asia. VPower is the largest system integration provider of gen-sets and power generation systems ("PGSs") with power output of 800 kW and above in Asia, in terms of revenue in 2015[1]. VPower is also the largest private gas-fired engine-based distributed power generation ("DPG") station owner and operator in Southeast Asia in terms of secured installed capacity as of December 31, 2015[1]. Recognized for the achievements in its fast-track utility-grade DPG station projects, VPower won three distinctive awards at the 2015 Asian Power Awards, namely, (1) "Gas Power Project of the Year - Myanmar Electric Power Enterprise 230kV Substation"; (2) "Fast-Track Power Plant of the Year - Myanmar Electric Power Enterprise 230kV Substation"; and (3) "Power Utility of the Year - Indonesia PLN Diesel to Gas Plant Upgrade for Efficient Power Generation in Pekanbaru."
VPower operates two principal business segments: (1) System-Integration, or SI, business and (2) Investment, Building and Operation, or IBO, business. During its first ten years, VPower focused on selling gen-sets, integrating paralleling panels and designing, engineering, installing, maintaining and overhauling PGSs in China, laying the foundation of its SI business. In 2006, VPower expanded its SI business to new markets outside of China. Leveraging its experience with a wide range of applications and customers, and taking advantage of the growing distributed power generation demand in electrification countries in the emerging markets, VPower began its IBO business in 2012. Currently, VPower has invested, built and operated several DPG stations in Southeast Asia area and countries covered by the PRC government's Belt and Road Initiative, including: Indonesia, Myanmar, Bangladesh. The Group's first project in Ghana is expected to commence operation by the end of 2016, and the Group plans to further expand its footprint to Nigeria, Saudi Arabia and other electrification markets in the near-term.
Mr. Lam Yee Chun Samson, Executive Director and Executive Chairman of VPower Group International Holdings Limited, states that "The continuous growth in global gen-set market is mainly driven by growing demand for DPG stations led by electrification markets, growing demand by data centers, growing need of supplement for non-dispatchable renewable power and the increasing availability of gas. The Asia-Pacific gen-set market, which is VPower's main market for SI business, has experienced faster growth than any other region in the world from 2010 to 2015, growing at a Compound Annual Growth Rate of approximately 11.9% in terms of sales revenue, and is expected to grow at 9.8% between 2015 to 2020, driven by strong increase in demand from China, India and other emerging countries in Southeast Asia[1]. We believe that with our extensive experience and established leadership in the DPG industry, we are well-positioned to continuously benefit from the market growth in the Belt and Road Initiative countries."
In addition to the competitive strength of being one of the world's leading large gen-set system integration providers[1] and Southeast Asia's largest private gas-fired engine-based DPG station owner and operator[1], VPower has also established strong partnerships with MTU Friedrichshafen GmbH ("MTU"), Bergen Engines AS ("Bergen"), CRRC (Hong Kong) Co. Limited ("CRRC") and China National Technical Import & Export Corporation ("CNTIC"). VPower has entered into a wide range of memoranda of understanding and strategic agreements with MTU, a globally recognized leading engine manufacturer, and its affiliate Bergen (both subsidiaries of the Rolls-Royce Group) to co-develop the natural gas and biogas markets and DPG stations globally (particularly in emerging markets) to meet the needs of the growing global DPG market. MTU also provides VPower with dedicated support from MTU's global network for its engines, spare parts and after-sale services for VPower's DPG stations. Moreover, VPower has also established long-term cooperative relationships with its strategic partners CRRC and CNTIC that support and enhance the Group's global procurement, DPG project execution and financing capabilities. In 2014, VPower signed a project co-development agreement with CRRC and CNTIC for the co-development and construction of DPG stations in countries covered by the Belt and Road Initiatives, where both CRRC and CNTIC have extensive local experience.
Leveraging on the business growth brought by the increasing electricity demand in Southeast Asia, VPower has promising growth prospects. The aggregate DPG installed capacity in VPower's existing and key target markets is expected to grow at Compound Annual Growth Rate of 17.6% between 2015 and 2020[1]. Compared to large-scale centralized power generation ("CPG") projects which take years to plan, finance and construct, DPG stations of VPower's IBO business have a shorter construction lead time (usually 2 months to 1 year), lower upfront capital requirement, lower transmission loss, providing significant advantages to off-takers. VPower's PGS fleets are young, fuel efficient and technologically-advanced, and enable the Group to competitively address the current needs of the fast-track utility-grade DPG market, which calls for lower cost, cleaner energy and faster delivery of reliable distributed power.
With years of accumulated business development experience, VPower enjoys operational synergies between its SI and IBO businesses. VPower is able to leverage on the technical expertise and experience built from its SI business to enhance its IBO business. The established global network developed under the SI business provides VPower with important market insights on local power industries in emerging markets and helps the Group to identify potential customers and off-takers for its IBO business. The timely market intelligence gathered by IBO business allows SI business to better manage its supply chain and to tailor product design to current market needs. In addition, VPower has highly experienced management and technical teams allowing fast execution of projects.
Mr. Lam Yee Chun Samson concludes: "VPower aspires to become the world's leading private gas-fired engine-based DPG station owner and operator and gen-set system integration provider, providing fast, reliable, cost effective, and environmentally sound distributed power and PGSs. To achieve this goal, VPower will continue to build on our successful IBO business in existing markets, and to further expand our market share and project scope; to penetrate new geographic areas and expand into combined heating and power ("CHP") and power generation using new forms of gas by leveraging our multi-country platform and replicable business model; to actively work with MTU, key suppliers, research and development institutes, universities, and third party technology providers to develop more fuel efficient gen-sets by leveraging our existing advantage in technology. Meanwhile, we also plan to participate in acquisitions or joint ventures as part of the expansion of our IBO business, utilizing our global network established under our SI business, which will allow us to accelerate our expansion into new markets and grow our business in existing markets. VPower will strive to consolidate its leading position in the industry, to improve our overall profitability as well as to maximize the value for our shareholders."
[1] According to Frost & Sullivan
Source: VPower Group International Holdings Ltd
Sectors: Daily Finance, Energy, Alternatives, Daily News
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