Kerry Properties-led power venture collapses
Kerry Properties said a planned waste-to-power joint venture in Jiangsu province had been scrapped, the second power project on the mainland it abandoned in a year, after its partners pulled out.
Two members of the Kerry Properties-led consortium, which won the right to build and operate a waste incineration and power generation plant in Changzhou, withdrew in March, Kerry Properties said in a stock exchange statement. No reason was given.
The two members of the consortium are unrelated to Kerry Properties. The other member is Kerry CQ Environmental Engineering - 51 per cent owned by Kerry Properties and 49 per cent by companies controlled by the Kerry Properties controlling shareholder, the family of Robert Kuok.
'As the approval for the change in the composition of the consortium had not been obtained, the award [of the project] was subsequently revoked by the relevant authority,' Kerry Properties said.
Government approval is required for any change in the composition of the consortium. The consortium lost a non-refundable performance guarantee of US$281,250.
In July last year, Kerry Properties said it and its partners had abandoned a plan to build a five billion yuan, 1,200 megawatt (MW) coal-fired power plant in Jiangxi province. Kerry Properties had a 33 per cent interest in the aborted project. It cited lower than expected financial returns and higher risks due to soaring fuel prices, after conducting a feasibility study.
The attempt to diversify into the power sector had at the time raised concerns among some market watchers, although the company said it would bolster its infrastructure portfolio.
Kerry Properties is part of the Kerry Group, the largest shareholder in SCMP Group, which publishes the South China Morning Post.