SGCC to sell a $7.9 billion power unit to Shenhua Group

• 12 years ago (2012-04-26)
• Junior Isles

Asia 850

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State Grid Corp of China (SGCC), the country's largest power transmission and distribution firm, is planning to sell Shenhua Group a coal and power generation unit with assets worth about Yuan50 billion ($7.9 billion), sources have reported.

The Chinese State-owned Assets Supervision and Administration Commission (SASAC) have yet to approve the sale of State Grid Energy Development Co Ltd, sources have reported.

It is also not yet clear whether the whole unit, or just part of it, would be transferred to Shenhua, insiders have claimed.

Shenhua Group is the parent group of China Shenhua Energy Corp Co Ltd , which runs a large number of power plants and is one of China’s largest coal miners by volume.

"The divesture conforms to State Grid's plan and will strengthen Shenhua's competitive advantage in thermal power generation," one source stated.

The reason for SGCC’s planned sale is not immediately clear.

State Grid Energy Development Co reportedly had Yuan55 billion of assets at the end of 2011, making up around 2.5 per cent of SGCC's total, and the unit made a net profit of Yuan78 million in 2011 on revenue of Yuan18.9 billion.