Standard & Poor's (S&P) has affirmed CLP Holdings' rating even though the company's recent purchase of power assets in Australia and India are not expected to provide immediate returns.
S&P yesterday said CLP Holdings and its local arm - CLP Power Hong Kong - would retain their A-plus ratings because of stable outlooks.
The United States rating agency said the 'investments have speculative business and financial profiles'.
Moreover, Australia-based Yallourn Energy would require substantial capital expenditure to modernise the plant, S&P said.
The company would also be likely to require a restructuring of capital, and a resolution of industrial relations problems before substantial returns to CLP, it said.
S&P said India-based Gujarat Powergen Energy was expected to provide immediate cash returns, but its plant was in India, where investment returns were subject to institutional, counterparty and currency risks. Last week, CLP announced a US$594 million acquisition of an 80 per cent interest in the Asia Pacific assets of PowerGen of Britain.
