China’s Three Gorges Corp. is exploring an initial public offering (IPO) of its Brazilian unit as the Chinese energy giant seeks to expand in Latin America.
The Chinese state-owned company has held talks with prospective advisors to prepare for the potential share sale in Sao Paulo, Brazil, which could raise about $2 billion U.S.
An IPO could value China Three Gorges’ Brazilian assets at between $8 billion U.S. and $10 billion U.S. A listing could happen as soon as the end of this year.
At $2 billion, China Three Gorges’ Brazilian unit’s IPO would be the country’s biggest since Rede D’Or Sao Luiz SA’s offering in December 2020.
Brazil is a “priority country” in Three Gorges’ international growth strategy, according to the company’s website.
Since 2013, the Chinese state-owned firm has been investing in clean energy assets in Brazil including wind and solar power and is now the nation’s second-largest privately-owned power generator.
The IPO proceeds could help Three Gorges raise cash for further investments and acquisitions in Latin America. Market volatility and the results of a Brazilian general election in October this year could impact the IPO’s timing.
