CR Power cashed up for plant purchases | South China Morning Post
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  • Jan 29, 2015
  • Updated: 1:21pm

CR Power cashed up for plant purchases

PUBLISHED : Tuesday, 27 September, 2005, 12:00am
UPDATED : Tuesday, 27 September, 2005, 12:00am

China Resources Power Holdings is expected to use the 2.5 billion yuan it gains from the sale of a 10 per cent stake in Huaneng International Power Development to fund asset acquisitions.


Likely targets include its parent's 80 per cent-owned 1,200 MW Fuyang plant in Henan province, according to an ABN Amro report.


The plant is scheduled for completion in the first half of next year and China Resources Power is expected to take it over at cost as it comes on line, China utilities research associate director Pierre Lau wrote. 'We have already factored this acquisition into our [financial analysis] model,' he added.


A China Resources Power spokesman said the firm would use the proceeds for further investment but declined to elaborate. He said the analyst's assumption merely represented a personal view.


The company will complete the stake sale to China Huaneng and Bank of China on Friday. Huaneng International Power Development is the parent of listed Huaneng Power International.


Mr Lau also wrote that it would consider raising stakes in existing projects in which it does not hold a controlling interest, as well as investing in third party-run projects.


'The management believes some of the greenfield projects under construction in the Chinese power market may have insufficient professional management or financial resources for completion and thinks some of these assets might come up for sale,' he added.


ABN Amro has recently held roadshows for the company in Hong Kong and Singapore.


An analyst at a rival brokerage also believes it will buy its parent's assets, but added that buying project stakes from other parties seemed feasible only longer term.


'The large plants tend to be well run, so smaller plants may become its targets, especially those not owned by professional power firms,' he said.


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