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November 24, 2009

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Billionaire keen on Longyuan share sale

UNITED States billionaire investor Wilbur Ross plans to buy shares of China Longyuan Power Group, Asia's largest wind power generator, which aims to raise up to US$2.2 billion from its Hong Kong initial public offering, according to a preliminary prospectus.

Longyuan has landed four cornerstone investors for a combined US$330 million worth of shares, according to a preliminary prospectus obtained by Reuters yesterday.

WLR IV CLPG LP, a company controlled by Ross, has agreed to subscribe to what may be US$100 million worth of Longyuan's shares, according to the prospectus.

Ross, the founder of New York-based private equity firm WL Ross & Co, holds investments in firms in a wide range of sectors, from low-cost Indian airline SpiceJet Ltd to bond insurer Assured Guaranty Ltd.

Ross is known for restructuring failed companies, particularly in the steel industry, where he negotiated a deal with labor unions that many said saved International Steel Group.

Last year, he acquired H&R Block Inc's subprime mortgage servicing operations for US$1.3 billion.

WL Ross, formed by Ross in 2000, has been a part of fund manager Invesco Ltd since 2006.

Longyuan is the largest wind power generator in Asia and the fifth-largest in the world. It had a 24-percent share of China's wind power market in terms of total installed capacity as of the end of last year, according to a UBS report citing wind power research company BTM Consult.

The three other cornerstone investors are China Life Insurance Group, Value Partners Ltd, and Bank of East Asia's Chairman David Li Kwok-po, which plan to subscribe to US$180 million, US$30 million and US$20 million worth of shares, respectively.

Longyuan plans to raise up to US$2.2 billion by selling 2.1 billion shares, or 30 percent of its enlarged share capital, at a price range indicated between HK$6.26 and HK$8.16 (81 US cents and US$1.05) per share.

The company initially planned to raise about US$700 million through the IPO, sources said in July, but boosted its expectations on stronger demand.

The deal has lured big funds to subscribe as investors scramble to tap China's renewable energy sector.


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