China’s SSF secures large stake in GD Power Development
14 December 2012
By Hui Ching-hoo
China’s Social Security Fund (SSF) has secured 915 million shares in GD Power Development for around 2 billion RMB (US$317 million), building its position in the Shanghai-listed power firm to 5.3%.
GD Power Development said in a statement on Wednesday (December 12) that the firm has received approval from China Securities Regulatory Commission (CSRC) to issue 1.83 billion non-public offering shares to SSF and its parent group China Guodian Corporation (CGC) at 2.13 RMB apiece. Each party will receive 915 million shares. The transaction will make the pension fund the second largest shareholder in GD Power Development after CGC.
The statement noted that SSF is adept at fundamental investing, displaying a stellar track record of 8% gains per annum since its inception. With this, the firm introduced SSF as strategic investor. The lock-up period for the transaction is 36 months.
This is the first time that SSF has dabbled in the power sector. Traditionally, its portfolio has been significantly weighted toward leading domestic banks and insurance companies, such as Bank of Communications.
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