(Yicai Global) Sept. 25 -- China Yangtze Power is set to list its Global Depositary Receipts on the London Stock Exchange to begin trading on Sept. 30, the company announced today.

The firm has priced the GDRs at USD26.46 per share and will raise USD1.8 billion from the issue or up to USD2.0 billion if it fully exercises its greenshoe overallotment option, per the announcement.

The Beijing-based firm is the builder and operator of China’s Three Gorges hydroelectric power station. It has an installed power-generating capacity of 45.5 million kilowatts in the stem stream of the Yangtze River and is the world’s largest listed hydroelectric plant.

The firm’s GDR issuance price on the LSE is equivalent to CNY18.02 (USD2.64) per share on the Shanghai Stock Exchange [SHA:600900], calculated based on one GDR representing 10 of the firm’s shares on the SSE and the 6.81 central parity rate of the US dollar against the Chinese yuan set by the China Foreign Exchange Trade System & National Interbank Funding Center today, a bit lower than the firm’s stock price of CNY18.86 at midafternoon.

The company’s shares rose around 15 percent in the middle of last month on expectations it was to pursue a secondary public offering on the LSE, but began to plummet after hitting a record CNY21 per share in mid-month. Its stock fell 3.04 percent to CNY18.81 per share after lunch today.

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Yangtze Power first announced its plan to list on the LSE in June, saying it will use the proceeds to repay international syndicated loans it took out to buy a stake in Peruvian electricity distributor Luz Del Sur and supplement its working capital.

The firm will be the third Chinese listed company to go public on the LSE via GDR under the Shanghai-London Stock Connect. Huatai Securities listed on the London bourse last year, and China Pacific Insurance Group did so in June.

SSE-listed companies issue GDRs under the Shanghai-London Stock Connect in the UK based on their domestically-traded A-shares. The GDRs represent the firms' underlying security equity in China, and foreign investors are free to buy and sell the GDRs in the secondary market just as they would normal shares.

Global depositary receipts are bank certificates that represent shares in a foreign company. An overseas branch of an international bank holds the shares, which trade as domestic stocks, but various bank branches also offer them for sale worldwide. Markets use GDRs to raise capital denominated in either US dollars or euros.

A greenshoe is an over-allotment option in an initial public offering based on a clause in an underwriting agreement granting the underwriter the power to sell investors more shares than the issuer initially planned if demand outstrips expectations.

Editor: Ben Armour