Chongqing Sanfeng Environment Group Corp., Ltd, a provider of waste management services, seeks to raise as much as 2.6 billion yuan ($363 million) in an initial public offering (IPO) on the Main Board of the Shanghai Stock Exchange (SSE).
Backed by HK-listed China Cinda Asset Management, Sanfeng plans to sell up to 378 million common shares at a price of 6.84 yuan ($0.9) apiece, per a filing with the board.
The company kicked off its online roadshow for the IPO exercise on May 19, and according to its latest filing on Wednesday, it offered 37,826,000 shares for individual investors online, while the rest of 340,442,000 shares were bought by institutional investors offline. Sanfeng has sold about 337 million shares.
With the proceeds, Sanfeng plans to finance three waste incineration power plants in Chongqing, Shanwei and Dongying. In addition, Sanfeng will also fuel working capital.
Established in 1998, Sanfeng is engaged in waste management and renewable energy businesses. Its services include waste combustion, operational management, power plant investment, among others. The company claims to have managed a total of 48,950 tons of waste each day, and so far, it has invested in 43 power plant projects.
Sanfeng’s subsidiary Chongqing Sanfeng Covanta Environmental Industry recently made headlines along with three other companies including state-owned China Harbour for winning the bid for the construction of $321 million waste combustion center launched by Macau Environmental Protection Bureau, per its press release in March 2020.
After the IPO, state-owned Derun Environment will remain its largest shareholder with 43.8606 per cent equity interest, while the second-largest shareholder CITIC Group’s subsidiary CITIC Environment Investment Group will have 12.0816 per cent stake.
Additionally, China Cinda (3.6368%), Cinda’s investment unit Cinda Capital (0.3029%), and Xizheng Investment (2.4245%) will be its majority shareholders. Previously, in 2018, the three firms made an undisclosed strategic investment in Sanfeng.
State-owned China Securities is acting as its lead underwriter for the deal. The company will float the shares under the symbol “601827”.