Huadian Fuxin reduces IPO size

State-owned clean energy firm Huadian Fuxin Energy Corporation falls victim to the weak global economy.

The company cut by nearly two-thirds to US$340 million the size of its planned IPO in Hong Kong. It previously sought to raise US$940 million.

The company will offer 1.5 billion new shares in the base deal. Another 225 million will be offered in the over-allotment option that could increase the IPO size to US$391 million. The deal will be priced on June 20.

Huadian Fuxin will use 30% of the proceeds to buy wind turbines, gas turbines and other equipment, and 20% to repay short-term borrowings.

Analysts said the drastic reduction in value underlined the current weak climate for IPOs and the troubling global economic situation. The smaller IPOs this year emphasize the difficulty bankers and companies face when convincing investors to buy into equity markets.

Hong Kong's IPOs are experiencing their worst time in four years with deal volumes down 85% in the first five months of the year.