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Shenhua to buy assets from parent company
By Richard Fu |
March 2, 2012, Friday
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Online Edition
Online Edition
CHINA Shenhua Energy Co, the nation's largest coal producer, plans to buy assets from its parent company for 3.45 billion yuan (US$547.6 million).
The assets include equity stakes in three units of Shenhua Group and railway wagons, used to transport coal, the Shanghai and Hong Kong-listed company said in a stock exchange filing last night.
The equity stakes include a 50 percent share in Guohua Taicang Co, a power firm based in Jiangsu Province, and a 60 percent stake in Bayannur Co, which is engaged in coal washing and coal trading and is in close proximity to Mongolia.
Shenhua said the acquisitions will cut direct competition with its state-owned parent, expand its coal power business and increase coal imports from Mongolia, where coal prices are much lower.
Analysts see the acquisitions as a key step forward for the listing of Shenhua Group, but said they won't significantly boost earnings of the listed one.
"These assets to be acquired are mainly power and coal-related assets, and don't involve the group company's main coal-producing business," Hwabao Securities analyst Wang Guangju wrote in a note today.
Shenhua said the purchase will be funded by the proceeds raised in its Shanghai initial public offering in 2007. The 66.6 billion yuan IPO set a record on the Chinese mainland at that time.
Shenhua shares rose 1.13 percent to 27.81 yuan today in Shanghai.
The assets include equity stakes in three units of Shenhua Group and railway wagons, used to transport coal, the Shanghai and Hong Kong-listed company said in a stock exchange filing last night.
The equity stakes include a 50 percent share in Guohua Taicang Co, a power firm based in Jiangsu Province, and a 60 percent stake in Bayannur Co, which is engaged in coal washing and coal trading and is in close proximity to Mongolia.
Shenhua said the acquisitions will cut direct competition with its state-owned parent, expand its coal power business and increase coal imports from Mongolia, where coal prices are much lower.
Analysts see the acquisitions as a key step forward for the listing of Shenhua Group, but said they won't significantly boost earnings of the listed one.
"These assets to be acquired are mainly power and coal-related assets, and don't involve the group company's main coal-producing business," Hwabao Securities analyst Wang Guangju wrote in a note today.
Shenhua said the purchase will be funded by the proceeds raised in its Shanghai initial public offering in 2007. The 66.6 billion yuan IPO set a record on the Chinese mainland at that time.
Shenhua shares rose 1.13 percent to 27.81 yuan today in Shanghai.
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