NewQuest to privatise China Hydroelectric

Hong Kong-based secondaries firm NewQuest Capital Partners has entered into an agreement to acquire all outstanding shares in China Hydroelectric Corporation, a NYSE-listed company, according to a company statement.

China Hydroelectric owns, develops and operates small hydroelectric power projects in China.

NewQuest will pay $3.51 per American depositary share in the business, which is a 57.4 percent premium over the company’s closing price of $2.23 on 3 September 2013 – the last trading day prior to the initial proposal – and a 60.5 percent premium over its volume-weighted average 30 days prior.

The offer is an 18.2 percent increase from NewQuest’s original bid in September, when the firm offered a price of $0.99 per ordinary share or $2.97 per American depository share, according to an earlier statement.

NewQuest is investing in the company through both its first and second vehicles, according to the statement.

The firm reached a $215 million first close in December for its second fund, which is targeting between $300 million and $330 million, Private Equity International reported earlier. NewQuest Asia Fund II is smaller than its $400 million predecessor, but has a “clearly defined set of opportunities”, a source close to the matter said.

The China Hydroelectric deal took a “significant portion” of what has been raised for Fund II.

NewQuest declined to comment on the transaction, but it joins a number of Asian private equity firms that have tapped the US capital markets to privatise China-based companies.

In November, Baring Private Equity Asia proposed a $2.8 billion take-private of Chinese online game developer Giant Interactive – one of the largest such deals since the $3.7 billion private equity-backed privatisation of Focus Media in December 2012, led by FountainVest Partners.