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China Three Gorges is weighing a sale of its overseas assets: Bloomberg
Posted on Wednesday, 29 July 2020 09:47
China Three Gorges is exploring a disposal of a stake in its overseas asset portfolio in a deal that could be worth as much as USD 4.00 billion, people familiar with the matter told Bloomberg.
According to these sources, the entire unit could be valued at up to USD 20.00 million and the company may opt to later pursue a stock market flotation of either all or parts of the division.
The state-owned power company has reportedly approached sovereign funds such as Singapore-based GIC and China Investment Corporation about potentially acquiring the interest, said to be between 10.0 and 20.0 per cent of the group’s total international assets.
China Three Gorges has been working with advisors on setting up an entity to hold the assets and bring in strategic investors, the insiders noted, asking not to be identified as the situation is still private.
The size of the stake could change depending on the assets that are included in the deal, the people noted, adding the process is still ongoing and no final decision has been made.
Bloomberg observed the proceeds of a minority stake sale will reduce financial obligations and comes as the Chinese government is encouraging state-owned businesses to implement mixed-ownership reform, which should increase efficiency and competition.
China Three Gorges is a clean energy group focused on large-scale hydropower development and operation.
It is also engaged in the renewable energy sector, including wind and solar power, with a presence in more than 40 countries.
The company is billed as the world’s largest producer of hydroelectric power with an installed capacity of around 124.00 GW, both under operation and construction.
Zephyr, the M&A database published by Bureau van Dijk, shows there have been 800 deals targeting electric power generation, transmission and distribution announced worldwide in 2020 to date.
In the largest of these, Berkshire Hathaway Energy is agreeing to buy gas transmission and storage segment assets from Dominion Energy for USD 9.70 billion.
Other targets included PG&E, Direct Energy, Viesgo Infraestructuras Energeticas and Huadian Fuxin Energy Corporation.
© Zephus Ltd