CR Power to acquire generators from parent
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China Resources Power Holdings, the fourth-largest Hong Kong-listed mainland power producer by installed capacity, plans to buy power plants from its state-owned parent to further beef up its assets, according to company sources.
CR Power intended to issue new shares for the assets, part of its plan to double its capacity in three to five years, the sources said. No further details were immediately available.
CR Power shares were suspended yesterday during the afternoon break pending a 'possible disclosable transaction involving the issue of new shares', the firm said in a statement to the stock exchange.
The stock climbed 5.04 per cent to end at HK$19.60, a record high since it went public in November 2003. The stock has gained 50 per cent in the past three months.
CR Power chief executive Wang Shuaiting said in March that the company would buy the bulk of its parent's 2,000 megawatts of plants, mostly coal-fired generators in Jiangsu province, but did not give a timetable or a cost estimate.
Citigroup head of Asia utilities research Pierre Lau said in a research note last month that he expected CR Power to acquire 1,500 megawatts of attributable capacity from its parent in the second half of this year.
The firm, a unit of state-backed China Resources (Holdings), operated 19 plants and had an installed capacity of 8,003 megawatts at the end of last year, up 62 per cent on 2005.
China Resources (Holdings) owns 71.99 per cent of the power firm, according to stock exchange filings.
CR Power, which reported 32 per cent growth in net profit last year to 2.36 billion yuan, is also building new plants and buying assets from other domestic firms in order to achieve its capacity expansion target.
Last month, it won the right to buy two State Grid of China plants, including a 45 per cent stake in the 1,200 megawatt Yangzhou No2 plant in Jiangsu province for 1.8 billion yuan, and a 44.7 per cent stake in a 1,320 megawatt power plant in Xingtai, Hebei province, for 530 million yuan.