Chinas Debt-ridden Jinko Power Eyes $367m IPO In Shanghai

Jinko Power Technology, a debt-ridden Chinese company that develops and operates solar power plants, is pursuing an initial public offering (IPO) on the Main Board of the Shanghai Stock Exchange (SSE) to raise nearly 2.6 billion yuan ($367 million).

Jinko Power, which priced its shares at 4.37 yuan ($0.62) apiece, already issued over 535.13 million shares to individual investors through an online offering on May 6, according to updates on the board. The remaining 59.46 million shares, or 10 per cent of the total issued shares in the IPO, will be available for subscription among institutional investors.

The company, which received a green light from Chinese authorities to go public on the Shanghai board in April 2020, will float the shares under the symbol “601778.” Beijing-based brokerage firm CSC Financial serves as its principal underwriter of the deal.

As Beijing tightens subsidies to the solar power industry, the Chinese solar power firm is seeking to solve a crying need of capital through the IPO after it registered a debt-to-assets ratio of up to 72.18 per cent by the end of September 2019, according to its prospectus.

The number, which indicates the proportion of a company’s total assets that were financed by creditors, stood much higher than the industry average of 55.19 per cent. Jinko Power reported nearly 29.62 billion yuan ($4.19 billion) in total assets by the end of 2019.

Based in southeastern China’s Shangrao City, Jiangxi Province, Jinko Power is a clean energy developer specialized in the operations of solar power plants. It has operated 345 connected solar power stations in 2018, and has built a slew of plants in over 20 provinces such as Zhejiang, Jiangsu, Heibei and Anhui as of September 2019.

Its prospectus shows that Jinko Power generated annual revenue of 5.3 billion yuan ($755 million) and 735 million yuan ($104 million) in net profit as of 2019.

After the IPO, JinkoSolar will remain the controlling shareholder holding 30.86 per cent stake. Jade Sino Ventures Limited and MEGCIF Investments 6 Limited will hold 11.78 per cent and 9.95 per cent equity, respectively.

Proceeds will be invested to develop two photovoltaic power generation programs and a fishery-solar hybrid project, besides repaying bank loans.

Earlier in 2017, Jinko Power had closed an undisclosed Series A round funding from state-owned China Merchants Capital and Liyuan Group’s investment arm Liyuan Venture Capital.