China Shenhua Energy Co., Ltd, 73.06% held by China Energy Investment Corp (CHNENERGY), announced on March 1 to fund a joint venture with GD Power Development Co., Ltd, a listed subsidiary of the previous China Guodian Group.
China's previous largest coal miner Shenhua Group renamed to CHNENERGY on November 27 and finished the merger with Guodian Group by way of absorption – the leading power generator in the country – on January 4.
Based on date of assets evaluation on June 30, 2017, the company proposes to contribute 27.7 billion yuan of equities and assets of the relevant coal-fired power branches, accounting for 42.53% of the JV's equity interests, and GD Power, set to funneling into 37.45 billion yuan of equities and assets of its own, takes 57.47% of the company.
The JV's registered capital totals 10 billion yuan, 42.53 of which comes from China Shenhua and the rest of which is funded by GD Power. The JV, whose name has yet to be published, is mainly engaged in power and heat generation and sales.
GD Power also published related announcements, saying the transaction is beneficial to stabilize long-term coal supply and deepen cooperation between coal and power sectors, and also avoids overlapping investment and reduces risks of overcapacity.
With coal-fired power plants are mainly placed in the east and central regions of Zhejingjiang, Anhui and Jiangsu, the transaction will help China Shenhua further enhance the occupancy in these regions.
(Writing by Alex Guo Editing by Harry Huo)
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