It is reported that Hubei Energy Group the largest power generation enterprise in Hubei province plans to raise up to CNY 3.25 billion from a private placement of a maximum of 443.5 million shares at not less than CNY 7.33 per share.

The net amount to be raised will not exceed CNY 3.19 billion.

The private placement will help to improve the group financial status and lower its solvency risk. It had a debt-asset ratio of 67.25% as of end 2010.

Funds raised will be used on the construction of a wind farm and natural gas pipeline construction and CNY 957 million will be used to replenish working capital.

The wind farm to be funded by the proceeds of the private placement is located at Qiyue Mountain. To be built over two phases, the first phase will have capacity of 49.3 MW and will take 18 months to construct. The second phase has capacity of 49.5 MW and will take 15 months to build.

Upon completion, the first and second phases will generate on-grid power of 86.97 GWh and 88.28 GWh respectively.

The four pipelines to be built will supply natural gas to Wuhan, Hongan county, Macheng city, Jiayu county, Chibi county, Shishou city, Gongan county and Songzi county.

(Sourced from National Business Daily)