CLP wins 5b yuan Guangdong nuclear project stake bid

PUBLISHED : Wednesday, 30 November, 2016, 8:32pm
UPDATED : Wednesday, 30 November, 2016, 10:59pm

CLP Holdings, which controls the larger of Hong Kong’s only two electricity suppliers, has won a bid to buy a 17 per cent stake in the operator of a Guangdong nuclear power project for 5 billion yuan from CGN Power, China’s largest nuclear power projects developer.

CLP expects its total investment in the project in Yangjiang, western Guangdong province, to amount to 7 billion yuan, including the 5 billion yuan bid price and contribution of additional equity capital to the operator, CLP said in a filing to Hong Kong’s bourse on Wednesday.

“The acquisition is an opportunity for the CLP Group to invest in cost-efficient, non-carbon emitting generation and further enhance our presence in Guangdong province ... a key strategic market for the CLP Group,” the company said, adding that it will accelerate progress in meeting its carbon emission goals for 2020.

The sale, conducted through an open tender process via the China Beijing Equity Exchange, would add 1,100 megawatts of attributable capacity to CLP’s non-carbon emitting generation capacity when all six units of the plant are completed, it added.

At the end of June, CLP Holdings had total attributable generating capacity of 4,836MW in Hong Kong and 7,075MW in mainland China, including those in operation or under construction.

The deal is targeted to be completed in the first half of next year, but no later than the end of next year under the agreement signed.

The net profit attributable to the 17 per cent stake in the project operator being sold is 134 million yuan last year, and the attributable net assets at the end of last year were worth 2.42 billion yuan. Its “independently appraised valuation” was 5 billion yuan, CLP said.

CGN said in a separate filing to the Hong Kong bourse that it will retain a 61.2 per cent stake in the Yangjiang project after the sale, adding that it may book a 2.58 billion yuan gain in its capital reserves in its balance sheet, but will not book any profit or loss from the sale.

The gain amounts to the excess of the selling price over the attributable net assets value of the stake.

Three units of 1,086MW each are in operation and three more are under construction, CGN said of the project.