NewQuest is interested in acquiring all of the company’s outstanding ordinary shares at a price of US$0.99 in cash per ordinary share or US$2.97 in cash per ADS. The deal values the company at just over US$160 million.
Beijing-based China Hydroelectric’s ADS shares last closed at US$2.62 on the New York Stock Exchange.
NewQuest currently owns 49.8% ordinary shares of China Hydroelectric. It also holds options and warrants to acquire additional ordinary shares that could increase its stake of the company to a maximum 56.8%.
The proposal is subject to negotiation and may fall apart.
China Hydroelectric’s board of directors is reviewing the proposal and has not made any decisions. Its chairman of the board, Amit Gupta, is not participating in the reviewing process because he is also a partner of NewQuest.
NewQuest was established in 2011 from the spin out of Bank of America Merrill Lynch’s Asian Private Equity team and a portfolio of over 20 private equity investments. It currently manages one fund with capital commitments of approximately US$400 million.
Established in 2006, China Hydroelectric Corporation is an independent hydroelectric power company that owns and operates small hydroelectric power plants in China.