Taiwan Cement Corp. has withdrawn its planned €500 million ($541 million) green bond offering after European investors raised concerns about the company’s coal power generation revenues. The five-year bond, which was initially priced at about 180 basis points above benchmark rates, was shelved when the company disclosed that its coal-fired power plant contributes more than 10% to consolidated revenue.
According to Bloomberg data, the transaction was originally mandated to Credit Agricole and Deutsche Bank as global coordinators on February 12, with DBS Bank joining as joint bookrunner. By February 18, the deal status changed to “execution subject to market conditions.” However, by the morning of February 24, only Credit Agricole and DBS were actively marketing the sale, with Deutsche Bank notably absent.
Taiwan Cement confirmed that it couldn’t complete pricing as scheduled partly because revenue from its Hoping coal-fired power plant exceeds 10% of group consolidated revenue, surpassing the strict standards set by European green funds that prohibit coal generation revenue above this threshold.
The company defended the Hoping plant as providing critical electricity supply to New Taipei City and Yilan, describing it as a “social transition energy” asset. Taiwan Cement also cited volatile market interest rates as another obstacle to completing the pricing.
To satisfy green investors’ expectations, the company said it has already announced plans to decommission the Hoping plant’s coal units by 2040 at the latest and is considering divesting partial equity in the power plant. Taiwan Cement expressed gratitude for the interest shown by over 60 clients during the marketing phase and indicated it would seek an appropriate time to complete the issuance.
